Save and Invest—Stocks

In the ClassroomInteractive Lessons

Lesson 5

2 Building Wealth—Lesson 5 Federal Reserve Bank of Dallas

Instructional Objectives

Students will:

• Identify the stocks as shares of ownership in a company.

• Describe the role and variety of stock exchanges around the world.

• Use a balance sheet to explain the risk and rewards of stock ownership

• Categorize publicly held companies in terms of market capitalization, industry sector and location.

• Identify and describe the role and composition of stock indexes.

3 Building Wealth—Lesson 5 Federal Reserve Bank of Dallas

Stocks are...

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Markets

Apps

Auctions

Entertainment

Marketplaces

BALLGAM

E

CONCERT

SOLD

5 Building Wealth—Lesson 5 Federal Reserve Bank of Dallas

Markets

NYSENYSE NYSENYSE

NYSENYSE

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Stock Markets of the World

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Wealth-Building Assets

BW DAILY

Wealth-building assets are assets that generally appreciate over time or provide a return.

Stock Appreciation Dividends

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

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$

8 Building Wealth—Lesson 5 Federal Reserve Bank of Dallas

Building Wealth with Stocks

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Gathering Information

• Who?

• What?

• When?

• Where?

• How much?

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Classifying Companies

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BINGO

B I N G O7531311

1827202928

5355516046

6871636467

3144

4039

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Classifying Companies

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Indexes

YearTwo Movie

TicketsDinnerfor Two

Two Gallonsof Gas

Total Costof Date (Index) 1995=100

1995 $8.70 $21.12 $2.39 $32.20 (32.20/32.20)*100=100

1990 $8.44 $18.93 $2.38 $29.75 (29.75/32.20)*100=92

2000 $10.78 $23.93 $3.07 $37.78 (37.78/32.20)*100=117

2005 $12.82 $27.42 $4.16 $44.39 (44.39/32.20)*100=138

2010 $15.78 $32.04 $5.35 $53.17 (53.17/32.20)*100=165

ADMITONE

ADMI

T

ONE

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Stock Indexes

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Indexes by Location

NASDAQ Composite Index

DJIA

SP500

Russell 2000

SP400

U.S. Indexes

FTSE 100

MSCI EAFE

Nikkei 225

DAX

Hang Seng

International Indexes

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Market Cap Indexes (U.S.)

Russell 2000

RussellSmall Cap

Completeness

Small Cap

Russell MidCap

SP400

Mid Cap

DJIA

SP500

Large Cap

NASDAQComposite

Index

Russell 3000

Broad Market

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Sector Indexes

Manufacturing

High Tech Energy

Telecom Pharmaceutical

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Assessment

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