Category: Stocks

Question of the Day: Do investors buy stocks in companies based on TV commercials?

|
Jun 03, 2020
|
Question of the Day, Behavioral Finance, Investing, Stocks
Answer: YES Questions: Why do you think that investors buy stocks in companies after they see a TV ad on those companies?  Are there ads or commercials that you have seen over the past week where you think "Hmmm...that could be a good investment?" Do you think this is a good idea? What other research might you want to do before making a decision to buy stock?  Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.  Behind the...

Chart of the Week: How do stock, bonds and cash returns vary?

|
May 05, 2020
|
Chart of the Week, Investing, Stocks
Hat tip to Beth Tallman for this idea:  Explanation: This chart graphs the range in annual returns for stocks, bonds and cash (think savings account) with the average indicated in blue.    Questions: One of the core tenets in investing relates to the relationship between risk and return. Complete this sentence: the higher the risk of an asset, the _______ the expected return. Which of the following assets (stocks, bonds or cash) has the highest risk? Which asset has the...

Question of the Day: How did investors change their investment strategies in March after the 12% market drop?

|
Apr 28, 2020
|
Investing, Question of the Day, Stocks, Behavioral Finance
Answer:  Questions: In March 2020, the stock market had its worst month since October 2008. Based on the data in the previous table, what actions did investors take in March? When investors sell stocks they convert one asset (stocks) into another asset (cash). What are the reasons you think that investors were selling stocks in March and holding more cash? Your friend says, “Of course everyone knows the stock market is going to drop because of the pandemic. I’m going to wait...

Question of the Day: What stock has been the best performer this calendar year: Amazon, Walmart or Costco?

|
Apr 15, 2020
|
Investing, Question of the Day, Stocks
Answer: Amazon From FinViz (as of the close on 4/15/20):  Note: Percentage is the change in the stock price since January 1st.  Questions: Why do you think that Amazon has performed better than the other two companies? A recent study found that 6.3% of groceries were purchased online in 2019. Do you think the current pandemic will permanently alter the way people buy their groceries? Do you/your family have a favorite among the three companies? If so, which one do you/your family...

Question of the Day: What percent of investors at Vanguard (a large investment firm) have NOT made any trades in the face of recent market declines?

|
Mar 31, 2020
|
Question of the Day, Investing, Stocks, Behavioral Finance
Answer: More than 90% Questions: Do you think it's hard to do nothing with your investments when the stock market has dropped over 20% in a month? Why or why not? Your friend says "I know the market is going down in the next few weeks so I'm going to sell now and get back in when the prices go down?" Do you think it's easy to time the market and know when to sell and then buy back in? What are strategies that you can use to calm your nerves when the market goes down like it has over the past...

Question of the Day: How many bear markets (stock market declines of 20% off the peak) have there been in the past 63 years?

|
Mar 11, 2020
|
Investing, Question of the Day, Stocks
Answer: 10+1 or about once every 6 years. It was 10 until yesterday when the S&P 500 index was more than 20% below its previous high.  From Invesco:  Note: The number in bold is the duration (in months) of the bull/bear market. The %age is the rise or decline in stocks over that period. Bull in green and bear in red.  Questions What time period had the best performing bull market? the worst bear market?  How do bull and bear markets compare when it comes to their...

Chart of the Week: How have historical events affected the Dow over the past 120 years?

|
Mar 03, 2020
|
Investing, Chart of the Week, Research, Stocks
With the stock market last week undergoing its worst week since 2008, it's instructive to take the long view, the very long view. Here's a chart of the Dow Jones over the past 120 with historical events superimposed on the chart.    Questions: What historical event required the longest recovery time for the Dow Jones Industrial Average?  What historical event caused the last big drop in the stock market (before last week's decline)?  Find 2-3 historical events on the chart...

Reading List for February 28-March 1

|
Feb 28, 2020
|
Investing, Stocks, Current Events, Paying for College, Financial Literacy, Retirement
Given the huge and rapid correction in the stock market this week, we start this week’s list with the “Investing” articles:   This is the fastest market “correction” in history, and we aren’t done yet. (Yahoo Finance) "Is The Stock Market Going to Crash?" The Irrelevant Investor takes a deep dive for those of you that like numbers and stats and graphs to address this question. WSJ-(subscription) columnist Jason Zweig reports on survey results...

Question of the Day: Can you name the 4 companies worth over $1 trillion in market value (as of 2/21/20)?

|
Feb 25, 2020
|
Question of the Day, Investing, Stocks
Answer: Market Capitalization (as of 2/21/20)  Apple - $1.37 trillion Microsoft - $1.36 trillion Amazon - $1.04 trillion Alphabet (Google's parent) - $1.02 trillion Market capitalization - valuation of a company calculated by multiplying the current stock price by the number of shares outstanding for that specific company.  Questions: How many of these company's products do you use?  Calculate the percentage of students in your class who use each of the company’s...

QoD: Electronic Arts vs. Activision: Which has been the better performing stock over the past five years?

|
Feb 10, 2020
|
Question of the Day, Investing, Stocks
Answer: Activision Questions: Reviewing the chart, how much would your $100 investment five years ago have grown if you had invested in... Electronic Arts? Activision? The overall stock market (S&P 500)?  Would you have been better off choosing between these 2 companies or just buying the overall stock market through an index fund?  Which games do you prefer?  Would that be enough information to drive you to invest in one company over the other? What else would you want...

Question of the Day: Indicate if stock was among the best or worst performing over the past decade: Kraft/Heinz, Netflix, Under Armour, Ulta Beauty.

|
Jan 07, 2020
|
Investing, Question of the Day, Stocks
With a new decade upon us, let's look back at the 2010s to see which stocks were on the best and worst performing lists.  Answer: Kraft/Heinz: Worst (58% price decline) Netflix: Best (+3787% price increase) Under Armour: Worst (60% price decline) Ulta Beauty: Best (+1206% price increase) Questions: Why do you think that Netflix and Ulta Beauty have done so well as stocks over the past decade?  Why do you think that Kraft Heinz and Under Armour have performed so poorly? What...

Reading List for January 3-5 (2020!)

|
Jan 03, 2020
|
Financial Literacy, Student Loans, Stocks, Checking Accounts
Happy New Year! This week's list includes a few articles reflecting back on the the past decade, as well as reflections on personal financial health and habits. If you want an incredibly comprehensive look at what transpired in 2019, Barbara O'Neill has your back in this Journal of Financial Planning article, 2019 Personal Finance Year in Review.  Financial Literacy The emphasis in this article is moving the financial education much earlier in a child’s development. (Education Dive)...

QoD: Starbucks vs. Dunkin Donuts: Which company's stock has performed better over the past five years?

|
Nov 12, 2019
|
Investing, Question of the Day, Stocks, Index Funds
People tend to be pretty vocal about their preferred "go-to" coffee spots.  Who is winning the coffee war (from the investor's perspective)? Answer: Starbucks.  Questions: What factors do you think contribute to the very different market performance of these companies? Starbucks is much larger and has a larger international presence. Do you think those factors are important? Which do you personally prefer? Explain why you prefer it. Would you make an investment decision based on a...

Stock Showdown QoD: Which company has performed better over the past five years, Netflix (NFLX) or Disney (DIS)?

|
Sep 11, 2019
|
Question of the Day, Stocks, Investing
Answer: Netflix Netflix, at a recent price of $290/share, has increased 450% in the past five years ago, while Disney, at a recent price of $140/share, is up 169% compared to five years ago.     Questions: Both companies are in the business of entertaining, but have taken different approaches. How would you sum up each company in ONE sentence? What factors do you think contribute to the very different market performance of these companies? When you look for entertainment, which of...

Interactive Monday: Can You Time The Market?

|
May 19, 2019
|
Interactive, Stocks, Investing
Another engaging interactive to dispel the notion that one can time the market.  Here's the description of the game (from Betterment) which is about 3-4 minutes long and can be played multiple times: Many investors believe (or act as if they believe) they can beat the market through timing their deposits or asset allocation. Our interactive simulation puts you in the driver’s seat to decide whether to invest or sell based on actual New York Times headlines since 1928. Click below...