Basic knowledge of share market ppt

basics of investment banking ppt and characteristics of investment ppt
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Dr.DouglasPatton,United States,Teacher
Published Date:26-07-2017
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Introduction tow wS w.Thest isScio encks tist.com and InvestingObjectives • Explain What is a Stock • Explain the Types of Stocks • Explain the Classification of Common Stock • Describe the Role of Beta in Your Portfolio • List the Various Stock Screening Criteria • Explain the Types of Analysis in Stock Trading • Explain the Ratios for Valuing Firms • List the Criteria for Choosing a Broker • Explain the Common Stock Investing Strategies • Explain the Steps of a Typical Stock Transaction • Explain How to Read Stock Quotations • Explain the Calculation of Price-to-Earnings Ratio (PE) • Explain the Key Terms of Stocks and Investments • Describe the Rights of a Stockholder www.ThesisScientist.com • Describe the Various Investment OptionsIntroduction Peter Looney works as an executive. For a long time, Peter has felt that he should invest the extra amount of money that he makes from his job. www.ThesisScientist.comIntroduction He has been saving in cash form for a long time. However, he wants that he should use the saved amount to invest in something that could help him multiply his money and help grow his finances. www.ThesisScientist.comIntroduction Peter has always thought of starting a business venture to grow his money, however, he is greatly averse to the huge amount of risk involved in any business venture. So, Peter starts asking advice from his colleagues about what possible investment options are available in the market. www.ThesisScientist.comIntroduction George, one of Peter’s colleagues, advices him to invest in stocks and mutual funds. Stocks are the capital raised by a corporation through the issue of shares entitling holders to an ownership interest also known as ‘equity’. www.ThesisScientist.comIntroduction Mutual funds are an investment vehicle made of pool of funds collected through a regulated investment company from many investors. This pooled money is then used for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. www.ThesisScientist.comIntroduction Money managers operate the mutual funds by investing the fund's capital and attempt to produce capital gains and income for the fund's investors. George tells Peter that by investing in stocks and mutual funds, Peter can earn a small share of the great profits that big and successful organizations make for themselves and their shareholders. www.ThesisScientist.comIntroduction George tells him that although Peter will get to enjoy a part of the profit made by the organization, he will be spared of the hassles of running a business on his own, and also will undertake a much lesser risk than if he would have to run a business on his own. Therefore, although stocks and mutual funds would help Peter to multiply and grow his money, he would be able to do so by taking advantage of the stability and experience of these fast growing and stable organizations that have been www.ThesisScientist.com operating and making profits for decades.Introduction George also adds a word of warning for Peter. He tells Peter that the most important thing that he should keep in mind while investing in stocks and mutual funds is that he should determine the maximum risk that he is willing to take. www.ThesisScientist.comIntroduction Peter should always make sure that he never invests more than his risk taking capacity. George assures Peter that if he takes calculated risks and invests wisely; then stocks and mutual funds prove to be a very lucrative way of growing his money. www.ThesisScientist.comIntroduction Therefore, you can understand that investing in stocks and mutual funds are a great way to multiply and grow your money by undertaking calculated amount of risk according to one’s own risk taking capacity. Let us learn about stocks and investing in detail. www.ThesisScientist.comObjectives • Explain What is a Stock • Explain the Types of Stocks • Explain the Classification of Common Stock • Describe the Role of Beta in Your Portfolio • List the Various Stock Screening Criteria • Explain the Types of Analysis in Stock Trading • Explain the Ratios for Valuing Firms • List the Criteria for Choosing a Broker • Explain the Common Stock Investing Strategies • Explain the Steps of a Typical Stock Transaction • Explain How to Read Stock Quotations • Explain the Calculation of Price-to-Earnings Ratio (PE) • Explain the Key Terms of Stocks and Investments • Describe the Rights of a Stockholder www.ThesisScientist.com • Describe the Various Investment OptionsWhat is a Stock? • Any business needs money or capital whenever it has to start its operations or expand its business operations. • Thus, in order to raise this capital for a business start-up or expansion, the corporation would offer shares of stock for sale to the public. www.ThesisScientist.comWhat is a Stock? • By selling these shares or stock to the public, the company is able to increase its finance reserves and also get the necessary funds to start operations or expand its operations. • So, any individual who purchases a ‘share’ or ‘stock’ of a company becomes a part owner of a portion of that company, based upon the number of shares purchased compared with the number of shares that make up the company’s total stock offering. www.ThesisScientist.comWhat are Stock Exchanges? www.ThesisScientist.comWhat are Stock Exchanges? www.ThesisScientist.comWhy Stocks should be in Your Portfolio? • It has been found over several decades that, as an asset class, common stocks have outperformed all other major asset classes. • Also, stocks deliver strong long-term capital gains. • They prove to be one of the best and most tax-efficient types of return. www.ThesisScientist.comWhy Stocks should be in Your Portfolio? • You should include stocks in your diversified portfolio because the individual stocks in a diversified portfolio can reduce the overall risk of your portfolio. • Dividends and capital gains are taxed at a lower preferential federal tax rate and so if tax planning is done wisely, then stocks can prove to be tax-efficient assets. www.ThesisScientist.comObjectives • Explain What is a Stock • Explain the Types of Stocks • Explain the Classification of Common Stock • Describe the Role of Beta in Your Portfolio • List the Various Stock Screening Criteria • Explain the Types of Analysis in Stock Trading • Explain the Ratios for Valuing Firms • List the Criteria for Choosing a Broker • Explain the Common Stock Investing Strategies • Explain the Steps of a Typical Stock Transaction • Explain How to Read Stock Quotations • Explain the Calculation of Price-to-Earnings Ratio (PE) • Explain the Key Terms of Stocks and Investments • Describe the Rights of a Stockholder www.ThesisScientist.com • Describe the Various Investment Options