There are two main investments made in the stock market: stocks /shares and mutual funds. There is a difference between a stock and a share but is subtle and nowadays these words are used interchangeably. However, the slight change is that stock is used when referring to all the stock certificates from multiple companies while shares are referred to the stock certificates to a particular company. Mutual funds are a group of stocks and bonds. They work like a company where a group of people invest their money. They own shares which serve as a part of the holdings of the fund. Stock markets are the official places where stocks are traded (bought and sold). Some of the major world markets are FTSE 100, S&P 500 and Shanghai Composite. Each stock market has a different number of characters to represent them and the companies belonging to it; these are called ticker symbols. An example is NYSE has up to 3 ticker symbols while NASDAQ-listed stocks have 4 letter ticker symbols. Different letters have different meanings for instance, mutual funds ticker symbols usually have the letter x at the end and are alphanumeric. But how does the market work? The market is the place where supply and demand meets. Demand represents how much buyers are willing to buy (or spend) for a certain product or service, while supply refers to how much producers (or sellers) are willing to produce (or sell) for the price that they are receiving. They both easily affect the stock market; when the demand increases, the stock prices rise but, when the demand decreases, the stock prices fall.
There are many pros and cons in investing in the stock market: among the pros you can quickly sell your shares and get cash for the value of the stock sold. Another way of getting profit from a company is when it decides to give out dividends (money paid in cash by the company to its shareholders). An additional advantage is that you can invest in many different sectors (diversify your portfolio) to reduce the risk of loss because, if one of the sectors is struggling, you don’t lose all your investment, whereas if you were to invest all your money in a house and there was an earthquake, all your investments would be at loss. However, there are also cons. An example is that if the stock market is losing money stock investments are bound to be at a loss. Also, if one wants to have a big profit, the risk to lose money is higher. Stock markets are highly influenced by politics and unpredictable events which can deeply affect them.
Initial Companies to Invest in
- Brand name: Optical cable corporation
- Ticker Symbol: OCC
- A description of the product / service the company provides: This is a company that manufactures fiber optical cables
- Trade value on the 1st of September (price per share): 2.3
- Range over the last 52-Weeks (52-Week Range): 2.10-3.55
- Dividends per share (if applicable): 0.02
- EPS: -0.88
- Lastly, describe why you decided to invest in this company. Be specific and give more than one reason: I decided to invest in this company because I know that it is doing very well.
- P/E Ratio: N/A
- Brand name: Tesla Motors
- Ticker Symbol: TSLA
- A description of the product / service the company provides: This company is a car company
- Trade value on the 1st of September (price per share): 200.77
- Range over the last 52-Weeks (52-Week Range): 141.05 - 269.34
- Dividends per share (if applicable): N/A
- P/E Ratio: -24.14
- EPS: -2.16
- Lastly, describe why you decided to invest in this company. Be specific and give more than one reason: I decided to invest in this company because it only produces electric cars and electric cars are doing great in the market because they don’t pollute the environment. Another reason is because they just made a new model which is more affordable so more people will be able to access it and this will boost the brand’s economy.
- Brand name: Nortel Inversora
- Ticker Symbol: NTL
- A description of the product / service the company provides: This is a company that owns phone services like Telecom Argentina.
- Trade value on the 1st of September (price per share): 21.48
- Range over the last 52-Weeks (52-Week Range): 13.50-30.78
- Dividends per share (if applicable): N/A
- P/E Ratio: 29.033
- EPS: 0.84
- Lastly, describe why you decided to invest in this company. Be specific and give more than one reason: I decided to invest in this company because the number of people which have phones keep increasing by the year and the communication around the world is increasing therefore, this is a good business to invest in.
From 09/30/2016 to 11/06/2016
From the beginning till now, I struggled in my investments mainly because I didn’t invest in good companies or the few good companies which I chose had a negative factor which caused the buyers to stray away from its products. For example, Tesla was supposed to be going well due to the fact that a new model is soon to come out. However, a Tesla car caught fire and a few people were killed by another one. Therefore; less people bought Tesla cars causing the brand to decrease in value and making me to lose money. Thankfully, I had Optical Cable Corporation (OCC) which was doing very well and so I gained some money. Nonetheless, the profit earned from OCC was not enough to remedy the loss of Tesla. To try to regain what I have lost, I will try to invest in OCC multiple times. I will also research more attentively the brands which I plan on investing in to ba sure that they have a potential in increasing their stock market value.
From 11/07/2016 to 12/02/2016
Overall my investments had many ups and downs due to the many external factors which took place worldwide this autumn. My best Investment surely was the Optical Cable Corporation (OCC) as it always increased in market value and it was mainly the brand which helped me not to waste all my money. I bought the stock many times and then sold it to profit nevertheless; the profit was never enough to remedy the loss of my many other failing investments. If I would continue this project I would invest more money in buying more stocks of the Optical Cable Corporation because it is a brand which keeps increasing in value and I am positive that this company will gain me a lot of money. Most of the companies which I invested didn’t have a negative or positive effect on my bank account since they had ups and downs but they mostly stayed the same. An example is Nortel Inversora (NTL) as, at the beginning of my investments it increased but at the end of November it decreased; therefore, there were not many changes in my bank account. However, there was one investment that was certainly the worst and that was Tesla Motors (TSLA) because after many malfunctions of the cars, the buyers stopped to purchase the cars its market value decreased at a steep slope.
If I were to redo this project, I would invest in brands that were about to put on the market a new object or brands that wanted to relaunch because the more positive publicity there is, the more that the terms sold will the purchased by the buyers; therefore, their market value will increase. For example a good brand to invest in now would be chocolate brands because they have Christmas advent calendars being advertised and sold and because chocolate is very well sold during the festive Christmas holidays. Throughout this project I learned that investing money isn’t an easy thing to do if you want to make a profit because there are a lot of different aspects to consider if you want to invest wisely. For example the image/message projected to the customer needs to be positive because if the brand makes a mistake which is noticed by the clients, especially in the world that we live in today, everyone will find out and the image of the brand will be ruined for a great amount of time. In conclusion I learned that the destiny of your investments is mainly based on the external factors and what is happening in the world.