Financial Literacy: Buying and Selling Investments

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Chapter 12: Buying and Selling Investments

Sources of Investing Information
-Magazines
- Forbes, Business Week, Fortune
- News Magazines: Time, Newsweek, US News & World Report
-Newspapers
-Wall Street Journal and Barron’s
-Investor Newsletters
-Standard & Poor’s Stock Reports, Moody Investors Service, and Value Line Investment Survey -Company Reports
-Annual Report
-Prospectus
-Internet
- Bloomberg, CNN Money, Kiplinger, Morningstar, Reuters

Key Figures
-Current Stock Price- amount investors are willing to pay for a share of ownership in the company -Number of Employees - Increases in the number of employees can reflect growth or downsizing -Market Cap - The total value of a company in the stock market -Revenue - amount of money received from business activities -Net Income or Profit - amount of money earned after deducting all the business’s expenses -Profit Margin- profit shown as a percentage

-P/E Ratio - price-earning ratio compares the selling price of common stock to the annual profits per share -Current Ratio - measure of a company’s ability to pay its current debts from current assets

Stockbrokers
Full Service Brokers - qualified stock broker who provides advice about what securities to buy and sell. Discount Brokers - qualified stock broker who buys and sells securities at a reduced rate but only provides advice for a fee sometimes. Online Brokers - brokers that charge low fees with the least amount of service; no investment advice or management of assets and only sometimes research reports.

Financial Planners
- an adviser who helps people make investment decisions to stated goals How are Financial Markets Designed?
Primary Market - where IPOs or new issues of securities are sold usually directly from the company Secondary Market - where previously issued securities are sold Securities Exchange - are places for brokers to buy and sell securities for their clients Over the Counter Market - is a network of dealers and...
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