Bonus Material

Session 4: BONUS!

Volatility Key Takeaways:

• Diferent events or occurrences like a pandemic can greatly afect the capital markets/stock market and cause volatility in the market.

• Volatility in the market measures fuctuations in stock prices. Low volatility means small fuctuations and high volatility means large fuctuations. Low volatility can be interpreted as investors being complacent, not worried.

• High volatility implies an element of fear in investors’ current attitudes.

• During volatile times, many investors get spooked and begin to question their investment strategies. This is especially true for novice investors, who can often be tempted to pull out of the market altogether and wait on the sidelines until it seems safe to dive back in.

• Market volatility is inevitable. It’s the nature of the markets to move up and down over the short-term. Trying to time the market is extremely difcult. One solution is to maintain a long

term horizon and ignore the short-term fuctuations.

CHALLENGE ACTIVITY: Reading the Language of the Street

Using the data table as a reference, answer the following questions:

1. How many trades of Apple were made? ____________

2. What is the common stock dividend of each of these companies’ stocks?

Apple ________________

Ford _________________

3. Which stock is trading closest to its high of the year? _______________

4. What was the decrease in the dollar value of Google stock today? ________________

5. What was Ford’s closing price? __________________

6. Which company has the most attractive P/E ratio? ___________________________

Why? ______________________________________________________

KEY TERMS GLOSSARY

Capital Expenditures (CapEx)

The money invested by a company in acquiring, maintaining or improving fxed assets such as property, buildings, factories, equipment and technology.

Competitive Advantage

Conditions that allow a company to produce a good or service of equal value at a lower price or in a more desirable fashion, which allow the productive entity to generate more sales or superior margins compared to its market rivals. Competitive advantages are attributed to a variety of factors including cost structure, branding, the quality of product oferings, the distribution network, intellectual property and customer service.

Corporate Social Responsibility

A self-regulating business model that helps a company be socially accountable to itself, its stakeholders and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including environmental, social and governance.

Earnings Per Share (EPS)

A company’s net proft divided by the number of shares of stock. Net proft is revenue minus costs. It is a good refection of how well the company performed. If the company made a lot of money that year, there will be a higher EPS.

ETF (Exchange Traded Fund) A collection of stocks and bonds (or other securities) pooled into a single fund. You can buy and sell shares of ETFs on a stock exchange the same way you buy and sell stocks.

Investing

Buying assets such as stocks, bonds, mutual funds or real estate with the expectation that your investment will make money for you.

Investment Risk

The chance of losing all or part of the value of an investment.

IPO

An initial public ofering. The process by which a private company “goes public,” ofering shares for purchase by the public. IPOs allow businesses to gain capital and to shift ownership.

Market Capitalization (Market Cap)

Market Cap is the price of each share of stock times the number of outstanding shares.

Market Share

The percentage of an industry, or a market’s total sales, that is earned by a particular company over a specifed time period.

Mutual Fund

A professionally managed fund that pools lots of investors’ money in order to buy a basket of investments.

Revenue vs. Proft

Revenue is the total amount of income generated by the sale of goods or services related to the company’s primary operations. Proft, which is typically called net proft or the bottom line, is the amount of income that remains after accounting for all expenses, debts, additional income streams and operating costs.

Risk Tolerance

The amount of risk that an investor is comfortable taking or the degree of uncertainty that an investor is able to handle.

Shareholder

Commonly referred to as a stockholder; any person, company or institution that owns at least one share of a company’s stock.

S&P 500 (Standard & Poor’s 500 Index)

An index that tracks the stock price movements of the 500 largest U.S. publicly traded companies.

S&P/TSX Composite Index

An index that tracks the performance of the largest companies listed on Canada’s primary stock exchange, the Toronto Stock Exchange (TSX). Since the S&P/TSX Composite Index is comprised of Canada’s largest and most prominent companies (about 250 companies), it is often used as a barometer for the health of the Canadian economy.

Stock

A share of ownership in a business or corporation. Companies sell shares as a way to raise capital. Stock represents a claim on the company’s assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater.

Stock Market

The collection of physical and electronic markets where buyers and sellers can trade shares. It is like a giant, global auction. The stock market is the sum of all individual stocks and when an individual stock moves, the market as a whole would also move by a tiny amount.

Stock Market Volatility

Measures fuctuations in stock prices.

Ticker

A symbol by which stocks are identifed. Tickers are a few letters that distinguish a company’s shares in the stock market.

THE OFFICIAL ROCK THE STREET, WALL STREET SHOP!

Meredith Jones, ESG Leader RTSWS Board Member