Intro. to the Stock Market

• Stock is a certificate that shows you own a small fraction of a corporation. Companies sell stock to get money in order to invest in new projects within their company, or they might just want to decrease their capitaling for their own private use.
• The difference between a public and a private company is that a public company is one whose stock is traded by the public listed on an exchange such as the New York Stock Exchange or NASDAQ. A private company is one whose stock is held by one shareholder or a small group of shareholders, usually family members or close friends.
• The Dow Jones Industrial Average is the average value of 30 large, industrial stocks.
  Telling you the average of all those 30 big companies whether the stock of one goes down while the rest go up or vice versa, it is the average of all.
• A blue chip stock is a stock that is thought to be safe to invest in. It is in excellent financial shape and are favorably regarded by its investors.
• The New York Stock Exchange is a stock exchange based in New York City, New York. It is the largest stock exchange in the world by dollar value of its listed companies securities. The New York Stock exchange provides a means for buyers and sellers to trade shares of stock in companies registered for public trading. Now the NASDAQ is the largest screen based equity securities trading market in the United States, containing about 3,200 companies from the U.S.
• A mutual fund is money pooled together from thousands of small investors and then its manager buys stocks, bonds or other securities with it. When one contributes money to a fund they get a stack in all its investments.
• Some of the worlds biggest companies,are Wal Mart with their stock value being 195.1B, Exxon Mobil with their stock value being 333.0 B, and BP their stock market valu being 116.2B
• The P/E ratio of a stock is a valuation ratio of a company's current share price compared to its per-share earnings. So it is the market value per share divided by earnings per share, equalling the P/E ratio.
• A stock dividend is a dividend that is paid by a firm in stock rather than in cash. For all practical purposes, it has the same impact on a stock as a stock split.