21
Securities
Markets and Investments
Vanguard
A
Buying and Selling Securities
1 The Primary Markets:
investor
purchases securities directly from the issuer (usually investment banking
firm).
Investment banking firm:
IPO?
2 The Secondary Markets:
allows
trading of securities through one of many exchanges (NYSE, NASDAQ, ASE)
NYSE:
NASDAQ:
3 Accounts
Should you use a broker, a discount broker, or
buy on-line?
Mechanics of transactions
Limit Order
Market Order:
Discretionary Order:
Program Trading:
Commissions:
B
Investment Plan
What are your goals?
Factors in Personal Investment
* Safety
and Risk
* Investment Income
* Investment Growth
* Investment Liquidity
So you want to be a millionaire?
C
Traditional Investment Alternatives
1
Bank Accounts
2
Corporate and government bonds
3
Common stock
Dividends
Capital gains
Bull and Bear Markets
Stock splits
4
Mutual funds
-A wide variety
5
Real
Estate
D
High Risk Investments
1
Margin
2
Selling short
3
Techniques to reduce risk
E
Sources of Financial Information
1
Newspapers
2
Net
3
Brokerage Firms
4
Business Magazines
5
Corporate Reports
6
Security Averages: What is
the Dow, NASDAQ, and the S&P?
What do these
mean?
Hi
Lo
Stock
Sym
Div
Yld
PE
Vol
Hi
Lo
Close
Change
F
Regulation
1
State
2
Federal
* SEC
* NASD