Category: Stocks

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?

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Mar 31, 2020
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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?

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Mar 11, 2020
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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?

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Mar 03, 2020
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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

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Feb 28, 2020
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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)?

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Feb 25, 2020
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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?

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Feb 10, 2020
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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.

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Jan 07, 2020
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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!)

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Jan 03, 2020
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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?

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Nov 12, 2019
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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)?

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Sep 11, 2019
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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?

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May 19, 2019
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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...

QoD: How many of the 12 largest companies in 2000 were still one of the largest 12 in 2018?

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May 12, 2019
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Investing, Question of the Day, Stocks, Index Funds
Answer: 4 Exxon Mobil went from #2 to #11 Wal-Mart Stores went from #6 to #12 Microsoft went from #7 to #3 Johnson & Johnson went from #11 to #9 Questions: Compare the list in 2000 to 2018. Write one sentence that describes how the economy has changed in the past 18 years based on changes in the largest companies. Which industries have grown the most?  How many of the top 12 companies on the list in 2018 are you familiar with?  How has the value of the three companies that...

Reading List for May 11-12

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May 10, 2019
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Investing, Stocks, Advocacy, Credit Cards, Mortgages, Retirement
  Investing We will start with Investing this week because this week's biggest news is today’s Uber’s IPO. Here is all you need to know about the one of the largest IPOs! (NYT) Uber was priced at $45/share--the “low end,” and keeping the valuation at $82B, well below the expected $100B. Looks like “low end” wasn’t low enough. Watching CNBC Squawk Box as the market was “building the book” before the first trade was fascinating as the...

QoD: Nike or Under Armour: Which company's stock has performed better over the past five years?

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May 08, 2019
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Investing, Question of the Day, Stocks
Answer: Nike, by a long shot! Nike closed the trading day on May 1 at $85.27, up $35.77 on June 1, 2014, for an average annualized return of 19.35%.  Under Armour, on the other hand, closed the trading day on May 1 at $22.82, DOWN from its price of $29.75 five years earlier for an average annualized loss of over 2%. Here's the chart: Questions: What factors do you think contribute to the very different market performance of these companies? Which products do you personally prefer?...

Chart of the Week: Company Lifespan on the S&P 500

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May 07, 2019
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Index Funds, Chart of the Week, Stocks, Investing
From Innosight's research on Creative Destruction: Key insights include: The 33-year average tenure of companies  on the S&P 500 in 1964 narrowed to 24 years by 2016 and is forecast to shrink to just 12 years by 2027 (Chart 1). Record private equity activity, a robust M&A market, and the growth of startups with billion-dollar valuations are leading indicators of future turbulence. A gale force warning to leaders: at the current churn rate, about half of S&P 500 companies...