3.S: Summary
- Page ID
- 83081
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)Congratulations ‒ You Have Finished Chapter 3 ‒ Introduction to Stocks
You have reached the end of chapter 3, Introduction to Stocks. In this chapter, you have:
- Been introduced to the definition of stocks, their advantages and disadvantages, and historical returns
- Reviewed the rapidly changing universe of the various entities that constitute the stock market
- Investigated the various stock transactions and associated fees
- Explored the major stock market indices, the major characteristics of stocks, and various stock measurements
- Examined the major stock types, market capitalization, and stock investing strategies
You should now be able to:
- Describe the various components, characteristics, benefits, advantages, and disadvantages of stocks and stock investing
- Identify and describe the various major stock markets, stock transactions, and fees
- Outline the major stock types and their risk/return aspects
- Calculate stock measures including earnings per share, dividend payout ratio, price-to-earnings ratio, and market capitalization
- Describe the advantages and disadvantages of the major stock investing strategies
There is much material in this chapter. Please read it again and study the concepts and terms every day. Remember that your family members, friends, and colleagues are counting on you!
Your Feedback, Please
Did you enjoy our introduction to stocks? As you rummaged about the Internet or library researching the companies in the two assignments, did you find yourself excited about stumbling upon detours into unanticipated intellectual alleyways and dark corners? Did you unexpectedly come across prized nuggets of information about a company that interested you? Or was the research process similar to watching paint dry or worse, visiting the dentist? How was listening to the earnings calls and working through the worksheets? Again, as you did with the mutual fund research, analyze how you felt and what you thought during your studying of the material about stocks and working on the stock assignments. For those enrolled in the class at Southwestern, please post your questions and thoughts and feelings about stocks and your relationship to them on The Stock Steakhouse discussion forum. All others, please contact us directly or join our GroupMe discussion group. Most of all, we hope you are proud of yourselves. As mentioned, there is a ton of material in this Introduction to Stocks chapter but it is of utmost importance for you to know it all thoroughly. Remember: You are one chapter away from being an official Investment Guru for your friends, family, and co-workers. It is a weighty responsibility. You can’t let them down!
Lastly, it is my sincere desire that you are excited and ready for more analysis about stock investing. Why? Because, oh, boy, do we have a treat in store for you! We are going to learn techniques that should tilt the odds of being a successful prudent, long-term oriented stock investor in your favor. But as we will say over and over again, there are no guarantees! We will see you in our next chapter, Chapter 4: Fundamental Analysis: Valuation Models.