The stock market is a way to invest money and make more, or invest and lose some. Firstly, the basics. Stocks and shares are similar but have a major difference. Firstly a share is a unit of ownership in a company. A stock is the bigger picture. Stocks themselves are the money a company raises through the buying and selling of their shares. Buying shares can be done in stock markets. Some major markets are the New York stock exchange, London stock exchange and Tokyo stock exchange. A dividend is the money a company pays you, usually annually once you invest in their company by buying shares. This sum of money can be high or low depending on the company and amount of shares you have.
Next it becomes a little more complicated. Ticker symbols are a series of characters, which in the end represent a security and exchanged or traded amongst the public. Each market had ticker symbols that range from length to letters. Some may be shorter or longer and be simple or complex. Now a mutual fund is an account where people deposit money and eventually a professional takes that and invests it in stocks. Depending on the amount and quality of the stocks and shares, the people donating can make or lose money. Now supply and demand is basically a relationship between companies and investors. The demand refers to the desire for the product or stock, and the supply is how much is available. The supply depends on how much companies have, the price they’re receiving and the quality of the product. Whenever there is a high demand for stocks or shares, the price will usually increase. On that note, if there is an abundance of supply, the price will decrease if the demand does as well. Lastly, the stock market is a place to be clever. Investments and companies want to make money, as do you. Now a few pros to this system is that good investments lead to profits. Another is some business are low risk, meaning you won’t lose a lot of money. However, you won’t make much either. A con is that high risk companies are the ones that make you more money, but you could also lose more than you’d like. In conclusion, investing in the stock market requires research, knowledge and understanding, and finally a little luck.
So far within the stock market project, I’ve already learned so much about how the market works and which companies produce good and bad results. Firstly, in total I traded three companies because in total, they weren’t producing as much or any profits compared to my other companies. The companies I got rid of were L Brands (LB), Glaxo Smith Kane (GSK), Deckers Outdoor Corp (DECK). Once I got rid of those companies, I started to feel much better about my stocks. With that however, I wasn’t bringing in as much money as I would have liked. As a solution to that problem I researched more companies and the companies I bought during the process were Netflix (NFLX), and CBS Network (CBS). With these companies, I was confident that my portfolio value would improve, and I was correct, eventually. After buying my first reinvestment (NFLX), I did lose some money, but was relieved when the next week I was at a profit again.
During my re-evaluations, the companies doing well in the beginning continued to do well throughout. 21st Century Fox (FOXA) and Burberry (BRBY) were consistently doing well. These companies would continue to well throughout the two months as well. My other companies, Target Corporation (TGT) and Nordstrom (JWN) were doing well, not exceedingly but they were doing well enough to keep around. From what I understand, companies do well for previous stock owners before something good happens to them. If Burberry or Fox created successful new products, that reflects well on its shareholders. In addition to that, if other companies are just constantly steady, it also reflects well on their stocks.
In my portfolio, I wanted to add some more companies. While I didn’t do this immediately, I just wanted some more sources of income as to not rely on three main companies. In the coming weeks I would buy a few more companies, but with the exception of those three companies I traded, most of my initial investments were good choices.
After completing my stock market project, I understand now how the market works and how investing can be beneficial or not. It’s not about investing in the largest and most successful company right now, it’s more about taking a chance on a well known but smaller company, that’s where I made the most profits.
The best companies in my stocks have been the best since the start. 21st Century Fox (FOXA) and Burberry (BRBY) are the stock that have produced the best results from the start. The surprising thing about both these company is that the share price is quite inexpensive. This just shows that even well known companies can produce wonderful results. These companies are both high class companies, one being a designer fashion brand and the other being a major movie and tv show producer. This being said, the positive results are due to the quality of the products and the companies themselves. The other companies, CBS Network CBS), Netflix (NFLX), while both quite new, have been beneficial to my stocks, eventually. Netflix, as it is a extremely popular company has it’s ups and downs, but has still produced good results overall. In addition, Target Corp. (TGT) and Nordstrom (JWN) have also done consistently well, judging as those were some of my initial investments. I believe in judging a company's stocks, it’s important to remember that the most popular companies usually produce less profit than the reliable smaller companies. With this information, I was proud of my stock selections because while featuring a few big companies, none of them were disappointing.
If I ever had the chance to redo this project, I would definitely look into the stocks a little more. While I did some research, if I really looked at future predictions, past revenues and other important details, I could’ve avoided buying shares in some of the companies that I traded. These companies, Deckers Outdoor Corp (DECK), L Brands (LB), and Glaxo Smith Kane (GSK), were just not producing the profits and revenue that I needed in order to remain in good standing with my money. While I was still making profits with these companies, I was relying on the stronger ones to really bring me up. This is why I decided to cut some of these companies from my ownership after a few weeks/months. I would’ve also redone this step. If I had researched but also looked at my stocks more closely, I would’ve seen the signs earlier and avoided lowering my profit and ranking. Finally I think I would pass on the big companies. While NFLX was a good investment at the time, rethinking it, I believe another smaller and more reliable company would’ve helped me more in the long run
In conclusion, I’ve learned that the stock market is definitely something to be taken seriously. While we talk about this in our everyday lives, it’s something that requires effort, detailing and serious planning in order to receive good results from your investments. I’ve learned as well that you can’t trust major companies because while they may be popular, there are other companies out there that will give you more profit from your investments and are the better choice. An example of this was when I invested in NFLX. While it’s good company and brought in revenue at times, my smaller companies like TGT, JWN, BRBY and FOXA brought in more. All in all, it’s important to remember that it’s hard to really see a good company because they’re often overshadowed by the larger but less reliable ones.