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cornell_notes_stock_portfolio.doc | |
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CORNELL NOTES
What is a stock portfolio?
A portfolio is a grouping of all the stocks a person currently owns. A portfolio changes whenever stocks are bought or sold. Stocks are best for long-term goals as over time good stocks tend to grow and become more valuable. There are many reasons that stockholders buy or sell shares. Stocks can go up or down in value. Because some stocks do not perform as planned, it is best to have a diversified portfolio of stocks of different-sized companies in different industries. When stock is bought and sold, a trade is made with another stockholder. If an investor is buying 600 shares of Xerox Corp, the investor is buying the shares from another shareholder who wants to sell them, not from Xerox Corp. Only the first purchaser of the stock actually bought it from Xerox Corp. Most shareholders buy and sell stocks in multiples of 100 shares, which are called round lots. A purchase of less than 100 shares is called an odd lot. When you buy stock, even if its value increases, you will not make a profit until you actually sell the stock. If the shares are sold at a higher price than they were purchased for, you make a profit. The difference between the selling price and the purchase price is a gross capital gain. If you sell a stock for less money than you paid for it, you have a gross capital loss. You must report capital gains and losses to the Internal Revenue Service because each affects the amount of income taxes owed. Investors should keep careful track of the stock market and the stocks in their portfolio, so they know when to buy new stocks, add to what they already own, sell, or just hold on to what they own. Here you will learn how investors determine their capital gains and losses. |
Vocabulary |
STOCK MARKET LOG SHEET
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stock-market-game-log-sheet__1_.docx | |
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File Type: | docx |