Stage 1 - Initial Research: People who wish to earn extra money aside from their full-time job often like to invest their money instead of putting it into a savings account. A very popular way of investing is through the Stock Market. Some of the major world trade markets are the New York Stock Exchange, the NASDAQ, the London Stock Exchange Group, the Euronext, the Shanghai Stock Exchange, the Deutsche Börse and the TMX Group. There are both pros and cons to investing in the stock market. For example, it is useful if you want to save up for a far-off goal or even for retirement. However, if you invest in the wrong stock at the wrong time, that might result in a loss and you will lose money instead of making profit.
To better understand the world stock markets you will need some useful definitions such as the ticker symbol, the dividend, stocks and shares and mutual funds. A dividend is when a company distributes part of its surplus earnings to shareholders. The two major types of dividends are cash dividends and stock dividends. Cash dividends mean that the shareholders get paid part of the company's profit, while stock dividends mean that they get more shares. People tend to prefer stock dividends because they don't have to pay tax for that value, however, cash dividends provide a more regular income. Each listed company in the world stock exchange market has a unique ticker symbol to represent it, which is a combination of letters or numbers (sometimes both). The ticker symbol combinations vary from market to market. For example, the New York Stock Exchange has up to three letters in its ticker symbols, while the NASDAQ has four-letter ticker symbols. A mutual fund is a pool of investments owned by a collection of investors. Mutual funds give investors a chance to put all their money together and invest in multiple securities. It is important to understand the difference between stocks and shares. Stocks mean that you own part of the corporation’s assets and earnings. Shares mean that you demand equal distribution if the company makes a profit. Supply describes the total amount of a specific good that is available to customers.
Stage 3b: Reflection: Halfway through my Stock Market Project I have realised that the company in my portfolio that is doing the best is Adidas. I have made minor losses in all the other companies I invested in, which include Apple, Visa, American Eagle Outfitters, Alphabet, UPS, and Unilever. During the month of October, Adidas released 31 new shoe models, which could be the reason why its market value increased. Up to now, I have only made one entry into the Re-evaluations spreadsheet, although I have checked in on my stocks almost every day. The reason why I have only made one entry is that I didn’t quite understand how to fill in the spreadsheet, and I always forgot to ask the teacher during class. The only change I have made is that I sold American Eagle Outfitters because it was making me lose a lot of money. At this point, as I continue to invest in this project I would like to research companies more in depth before investing in them, and I would also like to be able to predict whether a stock will lose or gain market value. Even though many of my stocks are slightly going down, I am happy that my Current Portfolio Value is above the amount of money I originally started with.
Stage 4 - Final Reflection: Now, at the end of the Stock Market Project, the company that is doing the best in my Portfolio is United Health Group. It has almost twice as many earnings as any of the other stocks. Next comes UPS, then Bank of America. The only one of the stocks I have invested in that is losing money at the moment is American Airlines. I think that the reason why United Health Group has increased so dramatically is that it has recently gotten a new partner, which means it was able to expand consumer choice, reduce costs, and improve health outcomes.
If I were to redo this project knowing what I know now, I would make sure to always buy stocks when they are really low and just about to increase, and to always sell stocks when they are at their peak so that I can make the most money off of them. Also, I would invest in smaller companies and not gigantic ones because since they are so big, even when they suddenly increase dramatically you only make a very small profit off of them. I think that I would definitely invest in United Health Group again because I have made a lot of money by investing in this stock. I don't really have any other specific stocks in mind that I would invest in - I would have to do some research first. However, I have recently heard that iRobot is doing very well, so I might consider investing in that stock, especially since it is a small company.
Throughout the course of this project, I have learnt more about how valuable money is and that you have to be careful and make a fair amount of research, instead of just blindly investing it in any stock. The value of shares can increase/decrease dramatically in the matter of a day, which means that even though the stock market can be predictable, it is only like that up to a certain point. I have also learnt that the value of stocks also largely depends on major national/worldwide events. For example, the value of Twitter increased very dramatically on November 8 thanks to the Presidential election.