Carl's stock market project

Stage 1

In 2 paragraphs (8-10 sentences), use your own words to help you explain how the stock market works. Some key questions to consider as part of your explanation:

● What is the difference between a stock and a share?

● What is a dividend?

● What are some of the major world markets?

● What is a ticker symbol - and how does it differ from market to market?

● What is a mutual fund - and how does it work?

● What is supply and demand?

● How does supply and demand affect the stock market?

● What are the pros and cons to investing in the stock market?

A stock market is the collaboration of buyers and sellers of stocks. The transactions are made in a loose network of economic transactions and not in a physical facility. Stocks are sold in units called shares and a share is a unit of ownership or equity. Shares are one of the most traded financial instruments. Basically, if you buy a share of a company, you are buying a part of the company. The dividend is a payment made by a corporation to its shareholders. Some of the major world markets are NASDAQ, London Stock Exchange Group and Shanghai stock exchange. A ticker symbol or a stock symbol is a process to uniquely identify publicly traded shares of a specific stock in a stock market. It can consist of letters, numbers or combination of both.

Mutual funds are investments that are made up of a pool of funds collected from several investors for the purpose of investing in securities such as bonds, money market instruments, stocks and similar assets. They are operated by money managers who invest the funds capital and attempt to make capital gains and income for the investors. Supply and demand is the amount of a product or service available and the desire of buyers for it. Supply and demand affects the stock market by determining prices of each individual stock that make up the market. An advantage of investing in stock shares or stock markets is that you will have capital growth. Generally the price of stocks and shares goes up on average over time so your portfolio will be worth more in the future. A disadvantage of investing in stock markets or stock shares is that the company that you invested in can become bankrupt which makes your shares worthless. You basically don’t make a profit out of the investment and you lose money. There are also often high charges for managed funds and mutual funds which invest in equalities. Overall, stock markets or stock shares can be beneficial and can get you money, but it can also be risky.

Stage 2.

Stage 3.

Which companies are doing the best in your portfolio? Which are doing the worst?

The companies that are doing the best in my portfolio are UPS and Microsoft. The company that is doing the worst is PepsiCo.

What reasons can you identify to explain the performance of each of your investments?

One reason to explain the performances of my three stocks is that politics can have influenced them. Another reason is that it can be due to things and events such as black Friday. UPS cruised through the black Friday weekend all-time high and didn’t lose a lot of money.

What are some of the changes you have made to your portfolio? Did you buy or sell any stocks? If so, please explain the reasons why.

Yes, I have sold many different stocks, for example Apple and Abercrombie. I sold Apple and Abercrombie because I wasn’t making a profit out of the companies and they financially went down during the presidential elections. Abercrombie was also making me lose money when I first bought it, which wasn’t good.

At this point as you continue to invest in this project, what would you like to change about your current portfolio? Why? No, I would not like to make any changes because I have lost a lot of money and the stocks that I currently have are making money.

Stage 4.

Stage 5.

Final reflection

Which companies were the best in your portfolio? Which were the worst?

The best companies in my portfolio were UPS and Microsoft. The worst company in my portfolio was PepsiCo because it was making me lose money.

What reasons can you identify to explain the performance of each of your investments?

Pepsico crashed because the CEO of Pepsico, Indra Nooyi smeared Donald Trump. She smeared him because she was a supporter of Hillary Clinton. Microsoft has been a profitable stock and it has increased in value over the past 2 months. UPS is also in the same position as Microsoft and is also very profitable. I think a reason for these increases in value is due to political reasons.

If you were to redo this project, knowing what you know now - what would you differently?

If I was going to redo this project, I would be more careful with which stocks I invest in. I didn’t really pay attention to which stocks were the best when I first started this project, but as time passed, I made sure to be more careful with my stocks because I was losing money every week.

Would you invest in the same stocks? Are there any other specific stocks you might invest in? Why?

I would invest in the profitable stocks that I invested in to make sure that I would make money. I’ve lost a lot of money throughout the duration of this project and if I were to redo it, I would really try to invest in a lot of profitable stocks, rather than useless stocks that were draining my money.

What have you learned about investing in the stock market?

I have learnt how risky it can be, but also how profitable and beneficial it can be. You can lose a lot of money by investing in stocks, but you can also earn more than you invested. I’ve also learnt how events and actions around the world affect the stock market. For example the presidential election affected companies such as Apple and made it drop in value. To conclude, I think stock markets can be very risky and dumb to mess with, but if you’re lucky, you can make a lot of money from stocks.

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