Stock Market Review

Agenda: (3 minutes)

Talk through the guiding question and agenda as a whole group.

Students should be aware of what they will be learning about today and what they can expect from the session.

Guiding Question: What are the key components of a case study and how can they be used to analyze company performance?

Stock Market Review (15 minutes)

In order to further our discussion of how companies are analyzed, we need to continue to develop students’ understanding of the stock market.

Please note that for some students this may be the first time learning about the stock market, while for others they may be familiar with the general concept of stocks.

Be cautious as you introduce new concepts to pause to check student understanding.

Example of student understanding quick checks:

Ask students to display a designated hand signal to indicate their degree of confidence in their understanding of the topic being discussed.

GOT IT! GETTING THERE! I NEED HELP!

If any of the students still have not created an Yahoo! Finance account, instruct them to do so today. The instructions can be found in session #1.

With Yahoo! Finance pulled up, review and record as a whole group the… • Company name • Ticker • Today’s price & date

• Take note of how the prices have changed since last session - what are some of the reasons the price might have gone up or down?

• How much the company is up or down since market open

• The YTD movement of the stock

• Point out the “Sustainability” tab

Show students how on Yahoo! Finance under “Chart,” you can view the history of a company stock by different date ranges.

Today, students will be sketching the YTD chart of Apple (AAPL). Be sure to introduce what YTD means and what months it would entail.

Discuss out loud what should go on the x-axis (time frame) and what should go on the y-axis (stock price).

New Investment Key Terms:

Mututal Fund ETF

Introduce the two new investment key terms to students.

Read through the definitions out loud and discuss the Napkin Finance graphics.

Talk through the concept of ETFs being passively managed vs Mutual Funds being actively managed.

Indexed vs. actively managed (Napkin Finance) Most ETFs are “indexed,” which means they try to match the performance of a specific index (such as the Dow Jones, S&P 500 or Nasdaq) as closely as possible. The fund does this by buying all of the index’s stocks and bonds (or at least a good sample of them) and holding them in the same proportions as the index.

Other ETFs are actively managed. Their investment managers try to beat the performance of a market index by picking specific investments that they think will have above average returns. While that might sound like a great way to make more money, these sometimes come with a few downsides, including:

• Higher expenses • Greater risk of poor performance • More tax bills along the way

Share with students that many popular ETFs in the U.S. are based off of the S&P 500.

During the next session, we will take a closer look at the S&P 500 and how the stocks within it are chosen.

NOTES