My initial research in the stock market:
The stock market is a risky game. It can either give you a lot of money but at the same time you have the risk of going the other way. The stock market is a complex game, let me break it down: You have your stocks and your shares. A stock is a share in the ownership of a company. A share describes a unit of ownership that represents an equal proportion of a company's capital. If you buy company stocks, you become a share holder, which means you own a part of the company. Now if you run a company as a manager, you try to grow the company. You can grow by getting more people to buy your products. Then your company is making money and is worth more. Therefore the stock price of your company is going up. If your company is losing customers then your company is losing money, which means that your stock price is going down. If your company is making more money, the share holder will also receive some money, which is called a dividend.
Supply and demand is a more advanced aspect of the stock market, supply means the amount of valuable things, products, or services that a company makes or supplies. Demand means the amount of products or services that buyers are willing to buy. If customers want to buy shares of a company stock prices usually will go up. If investors do not want to buy shares of a company, prices will go down.
Now another investment option available in the stock market is a mutual fund. A mutual fund is a collection of investments, which include stocks and bonds and other funds owned by a group of investors. The mutual fund is managed by a professional money manager. The objective of the investment of the mutual fund is determined by what types of securities it can buy. A mutual fund mostly focusses on specific types of investments.
Last but not least the ticker symbol is the unique way to identify a specific stock on the stock exchange where the stock is traded, such as the New York stock exchange or the Tokyo Stock exchange. Every company stock has a unique ticker symbol. From the ticker symbol you can see how many shares have been bought or sold.
The stocks I invested first were Bayer which is a pharmaceutical company. I invested in this company first because pharmaceutical companies are a good investment due to the fact that without medicine people would stay very sick or even die. Therefore, pharmaceutical companies are good to invest in so they can improve medicine.
I also invested in AT&T because it is a good short term company to invest. We were only investing in stocks for half a year, therefore it wouldn't be useful if the stocks would only increase over a years term. AT&T seemed like a good short term investment.
My reflection halfway through my investments:
Which companies are doing the best in your portfolio? Which are doing the worst?
Apple and Porsche are doing the best right now. AT&T and Nike are not going so well.
What reasons can you identify to explain the performance of each of your investments?
Since Apple brought out the new iPhone 7 people bought the new phone and Apple made more money. Porsche brought out a new car, the new Porsche Panamera which people bought and increased Porsche’s revenue. For AT&T and Nike I have no explanation.
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.
I sold Alibaba and Facebook, because they were at their peaks. By selling them I would get more profit.
At this point as you continue to invest in this project, what would you like to change about your current portfolio? Why?
Not much really, because I think that everything is good.
Final reflection of the stock market project:
During my investing I found that only 2 of the companies that I invested in were good profitable companies to invest in. Facebook and Alibaba were going down after they had reached their highest point. The companies that I first invested in were a very good investment from my point of view as they usually stayed positive and only rarely went into negative. Though the process of the company reaching its high point took quite a while. If I were to do this project again I would probably invest in different companies that are more popular, mostly because the more popular the company the more people are going to invest in it. The only risk with popular companies is that if the company is going up, then there will be a higher risk of the company going in the negative again, as most companies do not go up in the stock price forever.
If I would be able to continue to invest, I would probably invest in more long term companies and I would invest in more companies, mostly because I would then have a wider variety of companies to look after which reduces the risk if one or two companies go down. There are more stocks to earn money from. I have learnt a lot from this project, mostly how the stock markets work and how it can really impact your life. I also learnt the different terminology that goes with the stocks. There were also things such as how different systems had subsystems which would then have its own specific job, which I found very interesting. All in all I found this project very useful, because it prepares us for the future and how we can control our money.