Log in to your team's account at http://www.stockmarketgame.org
Make sure everything is entered in uppercase letters.
Once you login, you can change your password if you want. Just click the link on the bottom of the screen.
You should then begin your company research on at least 3 companies, using the worksheet given out in class. You can click the link at the top of the screen which says investor research in order to begin.
You can also use the following links to complete your research:
http://finance.google.com/finance?hl=en&tab=we
http://www.thestreet.com/
http://finance.yahoo.com/
http://www.hoovers.com/free/
Tuesday, April 8, 2008
Tuesday, April 1, 2008
Reading Stock Quotes and Ticker Symbols
Due: Wednesday 4/2
Columns 1 & 2: 52-Week High and Low - These are the highest and lowest prices at which a stock has traded over the previous 52 weeks (one year). This typically does not include the previous day's trading.
Column 3: Company Name & Type of Stock - This column lists the name of the company. If there are no special symbols or letters following the name, it is common stock. Different symbols imply different classes of shares. For example, "pf" means the shares are preferred stock.
Column 4: Ticker Symbol - This is the unique alphabetic name which identifies the stock. If you watch financial TV, you have seen the ticker tape move across the screen, quoting the latest prices alongside this symbol. If you are looking for stock quotes online, you always search for a company by the ticker symbol. If you don't know what a particular company's ticker is you can search for it at: http://finance.yahoo.com/l.
Column 5: Dividend Per Share - This indicates the annual dividend payment per share. If this space is blank, the company does not currently pay out dividends.
Column 6: Dividend Yield - The percentage return on the dividend. Calculated as annual dividends per share divided by price per share.
Column 7: Price/Earnings Ratio - shows how much investors are willing to pay for $1 of a company's earnings. The long-term average P/E is around 15, meaning most investors are willing to pay $15 for every dollar of earnings. A higher P/E often means investors are expecting future growth; a lower P/E means a stock that is already providing a sound investment
Column 8: Trading Volume - This figure shows the total number of shares traded for the day, listed in hundreds. To get the actual number traded, add "00" to the end of the number listed.
Column 9 & 10: Day High and Low - This indicates the price range at which the stock has traded at throughout the day. In other words, these are the maximum and the minimum prices that people have paid for the stock.
Column 11: Close - The close is the last trading price recorded when the market closed on the day. If the closing price is up or down more than 5% than the previous day's close, the entire listing for that stock is bold-faced. Keep in mind, you are not guaranteed to get this price if you buy the stock the next day because the price is constantly changing (even after the exchange is closed for the day). The close is merely an indicator of past performance and except in extreme circumstances serves as a ballpark of what you should expect to pay.
Column 12: Net Change - This is the dollar value change in the stock price from the previous day's closing price. When you hear about a stock being "up for the day," it means the net change was positive.
Directions: Answer the questions below based on the chart.
1. Is Revlon doing better or worse than yesterday? How do you know? What might explain it?
2. Is Rite Aid nearer to its yearly high or low? Would this be a good time to purchase the stock? Explain.
3. What are the stock ticker symbols for Revlon and Rite Aid? Are you surprised? Explain.
4. Did either Revlon or Rite Aid pay a dividend? What does that suggest about the company?
5. What is a P/E ratio?
6. Which two pieces of information shown on this stock chart would you consider most important for people to find out before purchasing the stock of a company? Explain.
7. Would the same information be the most important information for people who already own
stock in these companies? Explain.
8. What would you guess was the general trend of the market on this particular day? Explain
what information led you to this conclusion.
9. From this table can you tell the type of business that Revlon or Rite Aid conduct? Explain
how this information can be accessed.
Columns 1 & 2: 52-Week High and Low - These are the highest and lowest prices at which a stock has traded over the previous 52 weeks (one year). This typically does not include the previous day's trading.
Column 3: Company Name & Type of Stock - This column lists the name of the company. If there are no special symbols or letters following the name, it is common stock. Different symbols imply different classes of shares. For example, "pf" means the shares are preferred stock.
Column 4: Ticker Symbol - This is the unique alphabetic name which identifies the stock. If you watch financial TV, you have seen the ticker tape move across the screen, quoting the latest prices alongside this symbol. If you are looking for stock quotes online, you always search for a company by the ticker symbol. If you don't know what a particular company's ticker is you can search for it at: http://finance.yahoo.com/l.
Column 5: Dividend Per Share - This indicates the annual dividend payment per share. If this space is blank, the company does not currently pay out dividends.
Column 6: Dividend Yield - The percentage return on the dividend. Calculated as annual dividends per share divided by price per share.
Column 7: Price/Earnings Ratio - shows how much investors are willing to pay for $1 of a company's earnings. The long-term average P/E is around 15, meaning most investors are willing to pay $15 for every dollar of earnings. A higher P/E often means investors are expecting future growth; a lower P/E means a stock that is already providing a sound investment
Column 8: Trading Volume - This figure shows the total number of shares traded for the day, listed in hundreds. To get the actual number traded, add "00" to the end of the number listed.
Column 9 & 10: Day High and Low - This indicates the price range at which the stock has traded at throughout the day. In other words, these are the maximum and the minimum prices that people have paid for the stock.
Column 11: Close - The close is the last trading price recorded when the market closed on the day. If the closing price is up or down more than 5% than the previous day's close, the entire listing for that stock is bold-faced. Keep in mind, you are not guaranteed to get this price if you buy the stock the next day because the price is constantly changing (even after the exchange is closed for the day). The close is merely an indicator of past performance and except in extreme circumstances serves as a ballpark of what you should expect to pay.
Column 12: Net Change - This is the dollar value change in the stock price from the previous day's closing price. When you hear about a stock being "up for the day," it means the net change was positive.
Directions: Answer the questions below based on the chart.
1. Is Revlon doing better or worse than yesterday? How do you know? What might explain it?
2. Is Rite Aid nearer to its yearly high or low? Would this be a good time to purchase the stock? Explain.
3. What are the stock ticker symbols for Revlon and Rite Aid? Are you surprised? Explain.
4. Did either Revlon or Rite Aid pay a dividend? What does that suggest about the company?
5. What is a P/E ratio?
6. Which two pieces of information shown on this stock chart would you consider most important for people to find out before purchasing the stock of a company? Explain.
7. Would the same information be the most important information for people who already own
stock in these companies? Explain.
8. What would you guess was the general trend of the market on this particular day? Explain
what information led you to this conclusion.
9. From this table can you tell the type of business that Revlon or Rite Aid conduct? Explain
how this information can be accessed.
Dividends and Earnings
In class Monday, we read the following article on dividends, and you were supposed to complete the questions for homework if you didn't finish in class.
You are almost ready to select your team’s initial investments. To manage your portfolio wisely, it is important for you to know the ways to earn money through investing. The first thing you must understand is that supply and demand has a lot to do with how well your team’s portfolio will fare. Simply stated, shareholders of stock in high demand can sell their shares for a profit and may earning dividends.
Most smart investors are in the market over the “long haul;” they expect to ride out the ups and downs of daily market changes and see their investments grow over an extended period. In SMG, your team, in most cases, invests for a three-month period. You will not be able to see the impact of long-range trends on your investments. However, as you invest, keep in mind that social, economic and political issues and events impact the market. You need to keep these factors in mind as you invest and decide to sell. Changes in the economy related to taxes, monetary policy, war, unemployment, holiday-seasonal buying, a national crisis such as Hurricane Katrina, the avian flu, and even the weather—like an extended heat wave across the country—can impact stock prices.
In addition to your portfolio growing when you buy low and sell at a higher price, you can make money from the company whose stock you own. When a company is doing well, there are several ways they use their profits or earnings. These include:
1. Reinvesting profits for expansion, new product development, modernization and other improvements.
2. Giving a percentage of profits to the shareholder in the form of dividends.
The company’s board of directors decides whether to reinvest the profits or pay dividends to their shareholders or both. A dividend is a cash amount distributed to everyone who owned company shares on a certain date. A dividend is allocated per share; therefore the more shares you own, the greater the dividend you receive. The annual dividend is distributed to shareholders quarterly. For example, if you own 100 shares of XYZ Company and the company declares a $2 annual dividend, you will receive $50 each quarter that you own the stock during that year. Dividends can and do change over time.
Declaring a dividend does not guarantee that the company is healthy. Sometimes a company will continue to declare a dividend during a slow period because they do not want to scare off investors by having them think that the company is not doing well. Or they may not want to break a long corporate history of declaring dividends. Companies like Coca Cola, Procter & Gamble, General Electric, Pfizer, Inc, Eli Lilly and Bank of America have paid yearly dividends over 100 years. Each of them has weathered downturns in business during the past century. Over fifty percent of the Standard & Poor’s list of 500 leading companies declares a dividend.
Your SMG team portfolios are automatically credited with the cash value of dividends your stock has earned. You should know that if you sell shares right before the record date, you will not earn dividends even if you owned the shares for most of the previous quarter. Purchasers who buy the stock during the period just before the record date and up until the distribution date—called ex-dividend—do not receive dividends for that quarter. Your team’s dividends will appear in the cash balance of your portfolio. Your team can use these funds to purchase additional shares of stock in any company (not just in the shares of the company that has declared the dividend).
Some companies pay their dividends in the form of additional shares of stock; thus increasing the shareholder’s equity in the company. This is not a stock split. A stock split increases the number of shares of the corporation without changing the value of the shareholder’s equity in the company.
Most of the money your team will make or lose in the SMG comes not from dividends, but from price appreciation. Remember “buying low, selling high.” The wise investor also knows the rule of the marketplace: caveat emptor; let the buyer beware. Despite excellent research and careful monitoring your investments, there is nothing in the market is guaranteed to make a profit.
Name:_______________________________
Answer the following questions based upon the reading above.
1. How does an investor make money from an investment?
2. What do companies usually do with profits that are left after all expenses are paid?
3. What factors can influence the price of a stock?
4. Why do some companies continue to pay dividends even when they are not having a good year?
5. Can Stock Market Game portfolios earn dividends? Explain.
6. How will most teams make or lose money in the stock market game? What is the term for this process?
7. How will the information you learned from this reading influence your plans for investing as a member of your Stock Market Game team?
A Simple Guide to Making Money in the Stock Market
You are almost ready to select your team’s initial investments. To manage your portfolio wisely, it is important for you to know the ways to earn money through investing. The first thing you must understand is that supply and demand has a lot to do with how well your team’s portfolio will fare. Simply stated, shareholders of stock in high demand can sell their shares for a profit and may earning dividends.
Most smart investors are in the market over the “long haul;” they expect to ride out the ups and downs of daily market changes and see their investments grow over an extended period. In SMG, your team, in most cases, invests for a three-month period. You will not be able to see the impact of long-range trends on your investments. However, as you invest, keep in mind that social, economic and political issues and events impact the market. You need to keep these factors in mind as you invest and decide to sell. Changes in the economy related to taxes, monetary policy, war, unemployment, holiday-seasonal buying, a national crisis such as Hurricane Katrina, the avian flu, and even the weather—like an extended heat wave across the country—can impact stock prices.
In addition to your portfolio growing when you buy low and sell at a higher price, you can make money from the company whose stock you own. When a company is doing well, there are several ways they use their profits or earnings. These include:
1. Reinvesting profits for expansion, new product development, modernization and other improvements.
2. Giving a percentage of profits to the shareholder in the form of dividends.
The company’s board of directors decides whether to reinvest the profits or pay dividends to their shareholders or both. A dividend is a cash amount distributed to everyone who owned company shares on a certain date. A dividend is allocated per share; therefore the more shares you own, the greater the dividend you receive. The annual dividend is distributed to shareholders quarterly. For example, if you own 100 shares of XYZ Company and the company declares a $2 annual dividend, you will receive $50 each quarter that you own the stock during that year. Dividends can and do change over time.
Declaring a dividend does not guarantee that the company is healthy. Sometimes a company will continue to declare a dividend during a slow period because they do not want to scare off investors by having them think that the company is not doing well. Or they may not want to break a long corporate history of declaring dividends. Companies like Coca Cola, Procter & Gamble, General Electric, Pfizer, Inc, Eli Lilly and Bank of America have paid yearly dividends over 100 years. Each of them has weathered downturns in business during the past century. Over fifty percent of the Standard & Poor’s list of 500 leading companies declares a dividend.
Your SMG team portfolios are automatically credited with the cash value of dividends your stock has earned. You should know that if you sell shares right before the record date, you will not earn dividends even if you owned the shares for most of the previous quarter. Purchasers who buy the stock during the period just before the record date and up until the distribution date—called ex-dividend—do not receive dividends for that quarter. Your team’s dividends will appear in the cash balance of your portfolio. Your team can use these funds to purchase additional shares of stock in any company (not just in the shares of the company that has declared the dividend).
Some companies pay their dividends in the form of additional shares of stock; thus increasing the shareholder’s equity in the company. This is not a stock split. A stock split increases the number of shares of the corporation without changing the value of the shareholder’s equity in the company.
Most of the money your team will make or lose in the SMG comes not from dividends, but from price appreciation. Remember “buying low, selling high.” The wise investor also knows the rule of the marketplace: caveat emptor; let the buyer beware. Despite excellent research and careful monitoring your investments, there is nothing in the market is guaranteed to make a profit.
Name:_______________________________
Answer the following questions based upon the reading above.
1. How does an investor make money from an investment?
2. What do companies usually do with profits that are left after all expenses are paid?
3. What factors can influence the price of a stock?
4. Why do some companies continue to pay dividends even when they are not having a good year?
5. Can Stock Market Game portfolios earn dividends? Explain.
6. How will most teams make or lose money in the stock market game? What is the term for this process?
7. How will the information you learned from this reading influence your plans for investing as a member of your Stock Market Game team?
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