The Stock Market by

crystalkeala — 2023-11-23 02:16:04 UTC

Welcome to our Padlet about the Stock Market! 🍁

In modern day, the stock market has become so relevant in our lives; that at some point you too have heard a little bit of information about it. ✨

✨ The learning objectives that are anticipated:

Learning about what the Stock Market generally is.
The origin of Stocks
The TSX
Bull & Bear Markets
What investing is, and how does it benefit the Stock Market
The difference between the Canadian Stock Market and the U.S. Stock Market.
Mutual Funds vs ETFs

crystalkeala — 2023-11-23 02:34:16 UTC

KEY TERMINOLOGY ⬇

Stock Market: "Referenced as a marketplace in which you can buy and sell public shares held in companies."

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Stock Exchange: "A transaction within the Stock Market when it comes to exchanging, and buying and selling shares."

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Volatility: "It measures the unpredictable nature of the market and security experience periods of price movements."

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Dividends: "Are a form of payment in which a company makes to share profits with its very own stockholders."

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Trading Volume: "The number of shares traded over a specific period of time, usually a day."

Website One: How to Invest in Stocks: A Beginner's Guide

crystalkeala — 2023-11-25 19:03:12 UTC

With the use of the following five steps, you can determine what tactics most people use when investing in stocks, and how it can make your money grow. The first step is analyzing your risk tolerance levels. For this process of growth, success is mostly decided by chance. The second step is to set long terms goals that would require a great sum of money. The third step is to determine your investment style such as stocks, bonds, exchange-trade funds etc. The fourth step is to choose an investment account for example, a retirement plan. The last step, is to diversify the stocks that you choose to invest. 💲

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This website was chosen because it not only gives some insight on investing for beginners following along with the steps, but it also gives insight for other things such as the costs when it comes to investing in stocks, mutual fund loads, and an explanation of different types of brokers. This was very helpful in terms of understanding the strategies used to invest effectively. 💲

Website Two: Bull and Bear Markets

2023-11-27 02:36:46 UTC

Bull and bear markets are frequently referenced, but they are not exact terms. Generally, a bear market is when an asset/index drops 20% or more and continues until the price begins to recover, and a bull market is any period of time between bear markets. Bear markets have occurred 10 times over the last 70 year in U.S equity markets according to this definition. Each Bear market differs in characteristics from one another, with the U.S equities market experiencing lengths over the past 70 years ranging from just 3 months to a year and a half, and value dips from 20.7% to 57%. While Bear markets can be intimidating, it's important to remember that markets have always recovered from them, and the lower prices they bring often lead to returns once the market switches.

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This website was chosen due to it being from a Canadian bank and having a good working definition of the markets, as well as some insight into trends related to them. One piece of information from it that stands out is the graph of bear and bull markets in the U.S going back to 1958, giving a good wider picture of the markets.

Reflective Questions

2023-11-28 04:43:21 UTC

What did you learn about this topic that surprised you the most?
What I learned about the Stock Market that greatly surprised me was the fact that Canada's part to play in the Stock Market is only by the basic material and natural resources it possesses, along with the Canadian banks.
Provide a real-life example of how this topic is relevant or interesting for you.
One potential example for me is how I may use this information to direct my investing once I have the money. I plan to start working next year, and I would like to invest a bit in order to combat inflation but not in something very high risk. Knowing what I know now, I would most likely choose to invest in a mutual fund because of their management expertise, or in non-cyclical stocks in trusted companies, as they are likely to hold their value even in economic downturns.
If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?
I think the thing I would pass on is that the stock market is inherently risky. Companies can collapse, recessions can occur, and you can potentially lose most or all of the money you put in. As such, you shouldn't invest more than you are willing to lose.

Video One: How does the Stock Market work?

crystalkeala — 2023-11-28 22:49:46 UTC

The Stock Market dates back to the 1600s and the worldwide trade of gold, porcelain, spices, and silks. A portion of this trade was run by the Dutch East India Corporation who traded their goods with the use of ships. However, to keep this process going they needed the assistance of private citizens to invest in their corporation. It was a fair trade because those citizens would receive a share of the corporation's profits. Essentially, this method is used with today's Stock Market.

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This video was chosen to give a basic understanding of the Stock Market for those who are only beginning to discover the system. This video breaks down the process of how the Stock Market operates into just a few steps. It explains that a company starts with a simple thought which is then introduced to regular investors. If the investors have faith in the company's product, then they will invest and sponsor the company's initial public offering. It also explains how the stock market operates in terms of when the value of the stocks decline. It shows how detrimental losses can be which leads some investors to sell their stocks so that they can still obtain some value before the company hits rock bottom. This explanation showed the effects of supply and demand.

S&P/TSX Chart

2023-11-29 02:48:36 UTC

This is a chart tracking the price of the S&P/TSX Composite Index as well as its trading volume since 2000. As you can see, major dips in its price occurred after both the 2008 financial crisis and the beginning of the Covid-19 pandemic. The green and red of the trading volumes indicate if the Index lost or gained capital overall that year.

This chart was chosen due to it representing a large portion of the Canadian stock market.

Website Three: TSX History

2023-11-29 03:11:22 UTC

The history of the TSX began in 1852, when several Toronto businessmen met to form an "Association of Brokers". They would achieve this in 1861 when a resolution was passed to create the Toronto Stock Exchange. It started very small, with only 2 or 3 transactions daily from a list of 18 securities, but by the turn of the century it reached 1 million transactions per year and 100 companies listed. The TSX continued to grow throughout the 20th century, with accomplishments such as:

Not having any members default on their obligations to clients during the Great Depression
Merging with their primary competitor, the Standard Stock and Mining Exchange, in 1934
Reaching 1 billion shares traded in 1955
Launching the world's first Computer Assisted Trading System (CATS) in 1977
Closing their trading floor for an electronic model in the late 90's, at the time the largest stock exchange in North America do so.
Becoming the sole Canadian exchange for the trading of senior equities right before the turn of the century

The TSX became a for-profit company in 2000, and acquired the Canadian Venture Exchange in 2001. They also joined with the Montreal Exchange in 2007. Throughout the 21st century the company has grown and continued to acquire various smaller financial companies, as well as being acquired themselves by what was formerly Maple Group in 2012.

This source was chosen because it is a history of the TSX coming right from those who run the index in the modern day. It also provides various photos of the bank's old locations and memorabilia, which provide a snapshot of many different eras of banking.

Video Two: How to Invest in Stocks For Beginners (Will update)

crystalkeala — 2023-11-29 04:26:11 UTC

This video captures the true meaning of investing in stocks and the reason why many people do it today. It touches on the fact that when we invest in companies we can partially own that company. It also describes the value and how it may increase and decrease depending on the company. It also touches on how one might buy and sell stocks, explaining the setup process to buy stocks, and the action taken to sell the stocks.

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This video was chosen because it guides you through the healthiest choices to make when you are thinking about investing. It describes the different approaches to investing such as: 'buy and hold', 'dividend investor', 'speculator' and 'trader'. All these approaches are further explored in the video, which makes it more easier for one to pick and choose which exact approach fits them.

Website Four: Canada Vs US Stock Markets: How do they differ?

crystalkeala — 2023-11-30 00:02:12 UTC

The Canadian Stock Market and the U.S. Stock Market are very different in terms of size, profit, and the companies that are present. When it comes to investing in the Stock Market, it is best for Canadian investors to invest into Stocks from the U.S. This is because the U.S generally has larger Stock Market sectors. The sectors that are significantly larger in the U.S than in Canada are as follows: capital goods, energy, financial, technology, transportation, and many more. However, despite the U.S. leading with many sectors, there is a notable sector that Canada does lead with, and it is basic materials being 1.6 times larger.

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This website was chosen for the sake of diving deep into the specifics with data and percentages, along with comparing the Canadian Stock Market with the U.S. Stock Market. In this website, it briefly notes about how Canada's strength when it comes to the Stock Market lies with its basic materials/resources and as well as the Canadian banks. This website is also notable for being quite up-to-date with the data that has been collected and displayed, as of May 21st, 2023.

Video Three: Types of Stocks

2023-11-30 22:18:37 UTC

Stock can be categorized by 5 different factors:

Their sector and industry.
Their size. There are 4 categories of this, ranging from micro-cap/penny stocks all the way up to large cap stocks.
Their relation to the business cycle. This is split into cyclical and non-cyclical stocks. The price of cyclical stocks tend to rise and fall in turn with the state of the economy, while non-cyclical stocks are relatively insulated from it. Cyclical stocks include companies related to non-essentials and luxuries, such as travel, fashion, and tourism. Non-cyclical stocks include companies that serve basic needs, such as food, medicine, and utilities.
Their relation to investment strategy. This category include:
Growth Stocks: Stocks from companies that are growing at a fast rate compared to their industry. Usually bought at a fair or high valuation compared to their actual value, and rarely offer dividends.
Value Stocks: Stocks from companies that are financially stable but currently undervalued for various reasons.
Income Stocks: Stocks that pay regular and valuable dividends. Are also stable and profitable enough to continue paying dividends for the foreseeable future.
Where they are located. This is usually presented in the context of if stocks are national or international, with national stocks being easier to invest in.

This source was chosen as an overview of how stocks can be divided into categories. One piece of information that was valuable was the list of what industries are cyclical and non-cyclical, as this could aid investors in deciding to invest in certain industries based on the current economy and their willingness for risk.

Video Four: Mutual Funds vs ETFs

2023-11-30 22:58:42 UTC

First, some definitions.

Mutual Funds are groups of stocks and bonds controlled by fund managers. Their prices are set once per day and you pay fees to the company that manages the fund to essentially invest for you.

Exchange Traded Funds, or ETFs, are also groups of stocks, but they include stocks and bonds of a certain industry, commodity, or index, like the S&P 500. As such, their performance reflects that of what they are tied to. If the S&P 500 goes down, so will ETFs tied to it. Their prices fluctuate throughout the day and they can be purchased on exchanges, allowing them to be traded like stocks.

Each has its advantages and disadvantages. Mutual funds allow you to invest fairly passively (many retirement funds use them) and take advantage of the expertise of fund managers. ETFs put more of the responsibility on you, but offer lower fees, more flexibility (which can help with taxes), and greater control.

This source was chosen as a short and good overview of Mutual Funds and ETFs in comparison to each other. One piece of information from it that I found useful is the comparison between the market of the two investments, with Mutual funds having $13 trillion USD invested in them, and ETFs having only $2 trillion.