indexes, dividends

March 8, 2009

Contest Reminder IndexesDividendsApple PresentationDiscussion

http://www.biz.uiowa.edu/studorgs/hawktrade

Submit order forms by market open tomorrow

Remember: All short sales must be accompanied by protective stop

Created as a way of evaluating overall performance of the stock market

May attempt to track overall market or a specific sector, e.g. Financials

Big Three: Dow Jones Industrial Average S&P 500 NASDAQ Composite

Price-weighted average of 30 largest and most widely held companies

NYSE: DJIAKA “INDP”, “Dow 30”, or “The Dow”

On TV – INDP = level of Dow INDU = day’s change in Dow

As of Friday: 6,626.94Highest close: 14,164.53 (Oct. 9,

2007)

500 Large-Cap Companies Decided by Standard & Poor’s Not necessarily the 500 largest, but most

are in top 500 Ticker varies

Google: .INX Yahoo: ^GSPC

As of Friday: 683.38 Highest close: 1,565.15 (Oct. 9, 2007)

Average of all common stock and similar securities traded on NASDAQ ETF’s, preferred stock, derivatives not

includedNASDAQ: .IXICOver 3000 componentsAs of Friday: 1,293.85Highest close: 5,048.62 (March 10,

2000)

Can’t purchase indexes directlyMust purchase “index funds”

Closed-end fund which attempts to match the performance of index

May own exact components of index (Dow 30)

Or a select few (NASDAQ)Several companies have etf’s

SPDR, ProShares, iShares, etc.

Quarterly payment to all stockholders

How do I receive dividend? 3 Important Dates:▪ X-Date▪ Record Date▪ Payable Date

X-Date AKA Ex-Dividend date, Ex-Date, X-Div date, etc. Only need to own stock on this day to receive

dividend Could buy the day before and sell the day after Two days before record date

Record date All owners “of record” on this date receive

dividend Payable date

The day you actually receive the payment Usually a month or so after record date

AKA Stock Splits “2 For 1” split

Receive 2 shares “for” every 1 you own Price per share cut in half, number of

shares double Value stays the same

“1 for 5” split (reverse split) Receive 1 share for every 5 you own Price per share multiplies by 5 Number of shares divided by 5 Value stays the same

Other way to say it:

Company issued 50% stock dividend Equivalent of “3 for 2” split You receive 50% more shares E.G. if you owned 100 shares, 50% = 50 shares▪ Now own 150 shares

Does not affect value (more shares, lower price)

100% stock dividend = 2 for 1 split

Apple Inc., (NASDAQ: AAPL) formerly Apple Computer Inc., is an American multinational corporation which designs and manufactures consumer electronics and software products. The company's best-known hardware products include Macintosh computers, the iPod and the iPhone.

http://www.google.com/finance?q=aapl

Pros Financially Secure Over 30 Billion in CASH Leader in Innovation Analyst suggest Apple is Overweight (Will

out-perform market) IPOD/IPHONE Halo Article▪ Halo Effect---Consumers are purchasing other

Apple Products because they like the IPOD/IPHONE

Quality Products

Cons Slow Down in Consumer Spending No Dividend for Past 14 Years Steve Jobs is Ill- On Medical Leave

What Does Everyone Else Think?