Determine how many shares you can buy

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Reference no: EM131372808

Stock Journal

For this assignment, imagine that you have $25,000 to invest in US companies. You are buying used stock. The company got the money when it issued the stock originally. You will be buying it from an existing owner.You are investing, or buying the stock, because you believe the company will make money and pay you a dividend in cash. Each share of stock that you buy entitles you to any dividend declared and a vote at the annual stockholders' meeting.

Please note that this journal assignment is based on a pretend scenario and fictitious money. However, the assignment is based on actual stock pricing in real time situations. Do not invest your personal money for this assignment.

For your first journal entry complete the following

1) Indicate the companies you are investing in: Select three US companies that are publicly traded. Please use your knowledge and experience and pick, as many stocks as you'd like. Lastly, make sure you are practicing good diversification. Jim Cramer, Money Manger, on CNBC, plays a game at the end of his show called "Am I Diversified." Check out a short clip to get a sense of industry diversification athttps://www.youtube.com/watch?v=f3lDxexupcE.

There are many ways to find such companies and the stock prices, including the New York Stock Exchange at http://www.nyse.com, Google Finance athttp://google.com, NASDAQ at http://www.nasdaq.com, and http://finance.yahoo.com.

2) Indicate the amount you are investing in each company: Decide how you will divide $25,000 across the three companies; e.g. $10,000 in Company 1, $10,000 in Company 2, and $5,000 in Company 3. You decide the amount you are investing in each company. You do not have to provide any analysis to justify your decisions. You must only provide some reason for picking that company. For example, you might invest in Ford because that company gets a lot of your money and you hear that Ford is doing well, and will continue to do well.

3) Indicate the number of shares you are buying, and the price of the shares you are buying for each company: Once you decide the companies and the amount for each company, determine how many shares you can buy. If Company 1 is selling for $42.16, then you may buy $10,000/ $42.16, or 237.19 shares. But you cannot buy a part of a share, so you decide to buy either 237 or 238. In this example you buy 237 shares, at $42.16 per share, investing $9,991.92. You won't be able to buy exactly $10,000, or $5,000, or $25,000, but it will be relatively close.

Reference no: EM131372808

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