My Initial Research
The stock market is an association of buyers and sellers. The buyers are investors who have taken an interest in the seller's company. NASDAQ, The NYSE, Tokyo Stock Exchange are all examples of popular stock markets. When buying stocks, stocks are most often written as their ticker symbol. Ex. the symbol for Facebook is FB. More often than not people make the mistake of thinking a share and stock are the same thing. A stock signifies a claim on a company and its riches. A share is the unit in which stocks are sold. A share is the unit of equity and ownership one holds of a company and is declared in the form of dividends. A dividend is the proportion of money a shareholder will get from the company as it rises.
Another important part of financial marketing are mutual funds. As mentioned by investopedia “A mutual fund is an investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.” It is managed by operators called money managers who are in charge of investing the fund’s money in order for capital gains for the fund’s investors. A large part of the stock market revolves around the laws of supply and demand. Supply and demand refers to the the amount of a commodity, product, or service available and the desire of buyers for it. It is one of the basic and fundamental laws of commerce and serves as a basis for the stock exchange market. The effect it has on the market and stocks is huge. Supply and demand laws are what determine the certain prices of stock based on the demand from the investors and are the largest factors in regulating a stock’s price. If the demand of a stock is larger, the stock will be broadened and the price will be raised and vice versa.
As with anything, the stock market comes with it’s own pros and cons. The stock market has an abundance of stocks and can be considered as “easy money”. However stock markets suffer from constant change. The prices shoot up and down frequently and in some cases the money earned from a stock can be outweighed by money lost from it. Buying a stock is simple especially with a broker and can be done in the comforts of your own home. However the process after purchase is time consuming as an investor must continuously review his stocks as to see how they are faring. They are required to comprehend whether any changes need to buy and are under constant pressure to sell or trade the stock or keep. It is their job to keep the record and analyze the progression or regression made by their stock. As in comparison to a savings bonds, or a bank deposit, the stock market gives the possibility of earning more. However due to it being sensitive to all economic and global problems, the chances of loss remain.
Stocks I Chose to Invest In
The first stocks I invested in were Netflix, YUM! Brands and Microsoft. My reason for buying these stock was first of all the fact that I knew them. I wanted a variety of stocks to invest in so I chose 3 very different style companies.I chose to invest in Netflix because I constantly use Netflix and it is a very popular site. Alongside that Netflix is producing impressive results in the stock market.I chose to invest in Yum! Brands because it is one of the largest food brands and is faring quite well in the stock market. As well as the fact that, most of the fast food restaurants I got to, belong to this chain.I chose to invest in Microsoft because it is a well-known and popular brand and is the software brand that I use almost always. It is also a comparatively cheaper stock and is still doing well in the market.
Stage 3 Review
After a turbulent past months, finally my stocks are doing really well. Currently in my portfolio the best stock is NFLX (netflix) with a 21% rise. However in the past weeks my best stock was Samsung with a rise of up 10% but then is crashed causing my portfolio value to sky rocket downwards but with the recent rise in NFLX, my portfolio value has increased again. I’ve been constantly making changes to my portfolio by both buying and selling. I have mostly been selling stocks when they have been positive but are gradually going down. I have also bought a few stock which are making their way up the stock which can either be green or red. I buy stocks which are at a low price and sell the ones higher. My portfolio currently has a mix of red and green. My lowest stock currently is GSK 4% downfall which is not completely terrible. In the future I will continue to apply the same strategy of selling stocks which are green but are going down. That way I will not encounter a loss.
Reflecting back over the whole project, I believe I have done pretty well. My portfolio value has increased over time. After quite a long period of only loss, I am now currently gaining money. As I look over my portfolio there have been some heavily reliable stocks as well as a few which have constantly been at a loss. Stocks such as GlaxoSmithKline and Apple have been on a constant decline. Stocks such as ING and Phillips were very low at a point but have now hit as high as a 10% increase. Samsung is one of those stocks which has always been on an increase for me. Netflix was another stock that never went red but was usually just with 0.5 or 0.6% increases but lately Netflix had been my strongest stock with it once having gotten a 31% increase. Due to economic changes, some stocks have declined and during a positive change have also increased. During the explosions of the S7, Samsung dropped from a 11% increase straight to 0.5% increase. Apple, as the IPhone 6 didn’t fare quite well, never saw a proper increase. If I re-did this project I would check the trends of a stock more carefully before buying it because I did buy stocks without checking the trends. For example GSK, hadI checked the trend stock before, I would have known the stock was decreasing and therefore never bought it. The changes I’d make to this portfolio are quite simply that I’d get rid of a few ailing stocks. There have been some stocks that although still positive are decreasing. I would get rid of those before they completely crashed. I would probably buy a few other less expensive stocks that have an upward trend just so I could balance out any other decreases of stocks that come later. By investing in this stock market I have gained the ability to understand stocks. At the beginning of this project, I was buying randomly. I didn’t pay much attention to details about the stock but focused only on whether I knew the stock or not. I didn’t know if a stock was going to go up or down. However over the months, I have begun to understand the stock market and begun making more strategic decisions. What I have learnt from this project is how to invest money in a calculated way so I get profit. I believe this stock project will help me later in life, if I ever choose to invest in stocks.