Diversifying your portfolio is always important when trading in the stock market, but first of all, what’s my portfolio? Your portfolio is a collection of all the stocks you own. To diversify your portfolio is to buy shares in many different companies and industries. This allows some “safety” if the price of one of your stocks dives. Generally the overall price of a stock goes up from year to year, so diversifying your portfolio will ensure that you make money all the time.
Category: Investments
Volume
To explain it simply, volume is the amount of shares traded in a single period of time. This number is very important. Generally you want a minimum volume of 750 000, but the higher the number the better. This ensures that you will have a chance to sell your stocks when you do decide to sell them. If nobody completes a trade with you, you’ll be stuck with your shares until someone does decide to trade with you. You don’t ever want to be stuck with a stock you don’t want, so it’s very important to make sure that the volume is always high.
That’s all for now, Ben
Stock Market Simulators
Stock Market Simulators are a great way to learn how to invest in companies. They can teach you a lot and you don’t have to worry about losing money. There are several great online stock market simulators and I know of one great app that anyone can use. There is a downside to stock market simulators though. For the most part people make short term investments rather than long term ones on these simulators and although short term investments are great, you need to learn about both to be truly experienced in the stock market.
That’s all for now, Ben
Long Term Vs. Short Term
The difference between long term and short term stocks is fairly self explanatory, but it’s important to fully understand both types of investments before investing yourself. A long term investment is an investment that the investor intends to rise over a long period of time. A short term investment is just the opposite. Anyone who intends an investment to be short term hopes that the value of the stock will rise over a short period of time. Both types of investments are great and it’s important to understand the differences of both before investing in any company.
That’s all for now, Ben
Foundations of a Great Company – Mattel
Company Name: Mattel
Ticker Symbol: MAT
Founder(s): Harold Matson, Elliot Handler, Ruth Handler
CEO: Christopher Sinclair
In 1945 Harold Matson and Elliot Handler started Mattel, a company that sold picture frames. Matson later sold his part in the company to Elliot Handler and Ruth, Elliot’s wife, took over Matson’s role. The company went on to sell dollhouse furniture and is now one of the biggest toy companies in the world. You may know them for their popular Barbie dolls or Hot Wheels cars. Last year alone they made $6 billion. The company even made it’s way into the S&P 500. The current CEO once worked as the CEO of Pepsi Co meaning he has plenty of experience. The company has about 31 000 employees and is still growing. Mattel has $1.8 billion in debt, but as of this post being published, the company is worth over $11 billion. With the money they made last year they could have payed off their debt 3 times and still have had some money left over. I actually thought this was such a strong company that I invested in it several weeks ago and it has gone up since then. I would definitely invest in this company if I were you, but don’t just take my advice. Even some of the worlds best stock traders are wrong about certain companies. You should always do your research before investing in any company.
That’s all for now, Ben
Getting to Know Your Quarterly Report
Legally in both the United States and Canada, companies must create a quarterly report. This quarterly report is available on every company website (as long as the company is public).
The report contains what expenses the company had to pay and what profits they made in the past 3 months. This report is very detailed and will definitely help when you’re considering investing in a company.
Sometimes the quarterly report and other investor information can be difficult to find on a companies website, so here are some from major companies:
3M,Google, Amazon, Apple, AT&T, Bed Bath and Beyond, Best Buy, Boeing, Campbell Soup, Coca-Cola, Dr.Pepper-Snapple Group, Ebay, Electronic Arts, Facebook, Fedex, Ford, Gap, General Electric, General Motors, Hasbro, Home Depot, Kellogg, Keurig, Mastercard, Mattel, Mcdonalds, Microsoft, and Apple.
Thats all for now, Ben
The Stock Market in the Past Five days?
How has the stock market done in the past five days? Let’s use our knowledge on indices to help us calculate how it did.
In the past five days the s&p 500 went up about $23.00, meaning that if you were to buy one of the stocks on the s&p 500 you would have made, on average, $23.00. Don’t get too excited yet, between February 22nd and February 24th the s&p 500 dropped about $30 before rising to the amount it is today.
The nasdaq went up more than $25 and the Dow Jones went up about $50. Using this information we could easily estimate that the average stock did go up in the past week, that’s great news for all investors.
That’s all for now, Ben
Shares Outstanding
Shares outstanding is a term used to express how many shares a company has for sale. This information can be use to calculate what percentage of the company you own and market cap (which will be explained in a later post). If a company has 100 000 shares outstanding they literally have 100 000 shares on the market for sale. Shares outstanding is very simple information but it is an extremely important deciding factor when choosing wether or not to buy stocks from a company.
That’s all for now, Ben
The Foundations of a Great Company – Coca-Cola
Company Name: The Coca-Cola Company
Ticker Symbol: KO
Founder (Person who starts the company): Asa Griggs Candler
CEO (Person who runs the company): Muhtar Kent
Coca-Cola was founded in 1886 by Asa Griggs Candler. He bought the formula for $550 from John Pemberton. Coca-Cola is one of the companies on the S&P 500 and is traded on the New York Stock Exchange. The company makes over $44 billion a year, which is great for anyone who is considering investing in Coca-Cola. Muhtar Kent was first employed at the company over 30 years ago, but spent six years from 1999 to 2005 as the CEO of a different beverage company. Kent has a Bachelor of Science degree in Economics from the University of Hull in England and a Master of Science degree in Administrative Sciences from Cass Business School, City University London. The 129 000 people employed with Coca-Cola prove that the company is huge. Although Coca-Cola is successful today, it has had some struggles in the past. What the company thought was going to be a great product, New Coke, turned out to be a failure. The Coca-Cola Breakmate didn’t sell as well as originally planned either and the company stopped selling it more than 7 years ago.
All of the information above would be a great start to understanding if you want to invest in Coca-Cola, although having more financial information on the company would be important if you were truly considering investing in Coca-Cola. This is an important example of the some of the things you should know before investing in any company.
That’s all for now, Ben
Mr. Moose 