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Unformatted text preview: 2/11/2011 Complete Personal Finance Guidebook (pages 77‐102) pages First Draft of Spending Plan February 16, 2011 Final Draft of Spending Plan March 14, 2011 Quiz: February 21, 2011 Growth Stocks, Venture Capital, Life Insurance, Dividend Stocks, Corporate Bonds, Mutual Funds, Gem Stones, Money Markets, Metals, Fixed Annuities, Convertible Bonds, ETFs, Futures, Municipal Bonds, Art, Currencies, Hedge Funds, Value Stocks, Options, Variable Annuities, Utility Stocks, Treasury Bonds, Penny Stocks, T‐Bills, Exploration, Real Estate, Savings Speculative, Growth, Secure, Foundation Team 1: 4.34% / $10,434 Team 2: 3.40% / $10,340 Team 3: 2.48% / $10,248 Team 4: 2.99% / $10,299 Team 5: 4.08% / $10,408 Dow: 3.46% NASDAQ: 4.01% S&P 500: 3.73% 1 2/11/2011 “Unless you can watch your stock holding decline by 50% without becoming panic ‐stricken, you should not be in the stock market.” Warren Buffett What three stocks did you choose? Give a brief description of the company. What is the stock’s ticker symbol? Wh What exchange does it sell on? What is the stock price? What type of stock is it? Who are its competitors? Why did you choose those particular stocks? Team Exercise www.youtube.com/watch?v=a55G2kt93IU www.youtube.com/watch?v=VeNDB3OlhUE&feature=fvw Team Exercise 2 2/11/2011 Partial ownership in a company Dividends and capital appreciation More risky than mutual funds or bonds Many different categories of stocks as related to size of company or business of company Annual return ≈ 8% DJIA, Dow Jones Average, Dow 30 or Dow Dow Jones and Company (1882) Charles Dow and Edward Jones
Dow Jones News Wires Dow Jones Industrial Average Wall Street Journal In 2007 Dow Jones was acquired by? News Corp. Dow Jones Industrial Average How Many of These Companies Companies Do You Recognize?
3M Alcoa American Express AT&T Bank of America Boeing Caterpillar Chevron Corporation Cisco Systems Coca‐Cola DuPont ExxonMobil General Electric Hewlett‐Packard The Home Depot Intel IBM Johnson & Johnson JPMorgan Chase Kraft Foods McDonald's Merck Microsoft Pfizer Procter & Gamble Travelers United Technologies Corporation Verizon Communications Wal‐Mart Walt Disney Team / Class Exercise 3 2/11/2011 Dow Jones Industrial Average 1896 Which Company is still part of the Dow?
American Cotton Oil American Sugar American Tobacco Distilling and Cattle Feeding General Electric Laclede Gas National Lead North American Company Tennessee Coal, Iron and Railroad Company U.S. Leather pfd U.S. Rubber Blue chip stocks Cyclical stocks Defensive stocks Income stocks International stocks Foreign stocks Large and Small Cap. stocks Penny stocks Sector stocks Growth stocks Value stocks Class Exercise Over Valued Stocks & Under Valued Stocks What is used to define a growth stock? What is used to define a value stock? Which would you choose, and why? Team Exercise (Page 86 and 87) 4 2/11/2011 Unglamorous stocks are ______ stocks Value Glamorous stocks are Growth stocks _______ Good stocks are Growth stocks _______ Bad stocks are Value _______ stocks Value Stocks Class Exercise Which of the following is the best long term investment ? Which is a better long term investment ‐ growth stocks or value stocks? Why? 1. Large Value 2. Large Growth 3. Small Value 4. Small Growth Class Exercise Class Exercise 5 2/11/2011 Why do people buy stocks? Small Cap Value 15% Large Cap Value 13% Large Cap Growth 11% Small Cap Growth 10%
Data from page 36 “The Four Pillars of Investing” What is their expectation for the company whose stock they are thinking about buying? What do you think might be good measures of a company whose stock you are thinking about buying? Class Exercise Real Return =
Annual Return minus inflation rate Annual return = 9.5% Inflation rate = 3% Real Return = 9.5% ‐ 3% = 6.5% 6 ...
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