Initial Research: The stock market is a very interesting market that requires a lot of knowledge in order to fully understand how it works. The stock market is a market where companies participate in, the more people that invest in their company the more money the company makes as well as the investor. Unfortunately, the stock market has many pros and cons, but before going into the advantages and disadvantages, we first need to understand the basics of stocks. A stock is a word used to generalize a company so if an investor owns stocks they usually own one or more companies. While a stock is used to generalize any company, a share is the ownership of a particular company instead of just any. A dividend is an amount of money paid on a regular basis to its shareholders by a certain company. The money comes from the company’s profits/reserves. A shareholder is a person who owns a portion or share of a company. Company’s use ticker symbols as a way for people to identify that company. A ticker/stock symbol is an abbreviation of a company. The abbreviation can have numbers and/or letters. In order to be a part of the stock market, you must understand mutual funds. A mutual fund is a collection of investments owned by a collection of investors. Mutual funds give people a chance to put all their money together and have a selection of numerous securities. Supply and demand is the amount of the product available and how much people want it and how much they are willing to buy it for. When demands for stocks increase, the supply usually increases as well. When there is less demand for the product, stocks prices usually drop. All of these components of the stock market appear in all stocks around the world. Some of the major world stock markets include: the New York Stock Exchange, NASDAQ, the London Stock Exchange Group, Euronext, SIX Swiss Exchange, Japan Exchange Group, the Shanghai Stock Exchange. Going back to pros and cons of investing in the stock market, there are many components to consider before investing. In terms of disadvantages for the stock market, the stock market is not a very safe choice since the stocks go up and down daily. The stock market is also a very research needed place. Before investing in a company, you need to do a certain amount of research on that company because once you invest, you are a part of the company. The stock market is very unsteady since the company you might choose to invest in might not be very stable and could have a sudden drop or could eventually lead into bankruptcy. Even though there are many cons in investing in the stock market, there are also many pros to investing in the stock market. The stock market may be a way to lose money, but it is also a way to get a lot of money. There are many companies you can invest in so you don’t have limited choice. Over time, the stocks can go up which means your portfolio will be more valuable to other companies in the future giving you another way to earn money.
Stage 3 Reflection: All my companies are doing relatively well except for American Eagle Outfitters. I originally invested in American Eagle Outfitters because they had been doing well for the past year, but their price is dropping significantly. Netflix and UPS are doing very well, but Deckers Outdoor Corp is decreasing quite a bit. Hubspot. Inc is also decreasing in price but not as much as American Eagle Outfitters and DECK. Since AEO began decreasing in price, I sold 10 shares. AEO continued decreasing so I sold 10 more shares. I sold some of DECK and some of HUBS but I have made the most changes to AEO. I also invested in Disney and Alaska Airlines which are doing pretty well so far. I would like to increase some of my shares on the stocks that are doing well such as Alaska Airlines and Netflix. I might also want to increase my shares of the United Parcel Service Inc. American Eagle Outfitters is still not doing well, so I will probably sell even more shares of that stock.
Final Reflection: The companies that did the best in my portfolio were the more ‘famous’ ones. For example: Target, Netflix, Disney, Nordstrom, UPS were all doing very well. One company that I was surprised was Alaska Airlines. They did surprisingly well even though they are not a very ‘popular’ company. Since the beginning of the project, American Eagle Outfitters did not do well. It just continued decreasing in price. This was my worst stock. Visa fluctuated a bit, but was mostly decreasing with a few increases. DECK was very interesting since half of the time, it was dropping, but the other half of the time, the company was rising. I would invest in many of the same stocks since generally, the companies I picked did well. But, I would not invest in American Eagle Outfitters since they have not been helping me. I would also maybe invest in other more famous companies like Samsung which is doing very well. By investing in the stock market, I have learned many things. Primarily, I have learned that to have a good stock portfolio, you need to take risks and not be afraid to invest in something. Same applies for selling a stock. At the beginning of the project, I didn’t want to change much in fear of making it worse, but towards the middle, I discovered that the more I change my stocks, the better they become. Although changing could possibly lead to having a very bad stock, the chance of having a very good stock is higher. For example, Target was doing okay when I invested in it, but when I noticed it’s price was decreasing, I sold only a few of my shares. I was glad I still had quite a few shares left when Target’s price began increasing again. Even though at the end Target did very well, if I hadn’t sold those few shares I did, I would’ve regretted it later as I would’ve lost money. By investing in the stock market, I have also learned that although investing in stocks is very risky since you can lose money, I enjoyed investing in the stocks since I gained money. I learned a lot more about managing my money. For example, when I was low on money, I had to decide which stocks I wanted to increase my shares on to help me earn money to continue this process. I invested in Netflix a lot since they did very well almost the whole time. I learned that I could sell shares to get rid of bad stocks, but I could also buy even more shares for the stocks that were doing well. By investing more, I earned more money.