Investing in the stock market can be a bit of a nerve wracking experience. There are many variables that may affect your outcome leaving you in a less than glamorous position than you’d like to be. It is a gamble and you are using your own money to try and make your dream of lavish living a reality. With high reward comes high risk and that is common sense even for the unseasoned investor, but whether your investment be high or low risk, you must always do your research before investing. Know what you’re getting yourself into.
Some key points to keep in mind are the competitors of the company you plan to invest in and how their success can and will affect your investment, dividend per share, current selling price, annual lows and highs, among many other things. Luckily for the less-than-savvy investor there is finance.yahoo.com. It is a nifty little site that presents all of the above information, and more, in a neat and easy to access manner leaving little ambiguity for one to spend hours deliberating on. Companies Exxon Mobil Corporation, Unilever N.V., and Costco Wholesale Corporation where chosen to facilitate the explanation of the site and also of the stock market.
Exxon Mobil Corporation, XOM, is a company whose main selling point is oil and gas. They are a huge competitor in that area and that is why they were chosen. While plans are being made to phase oil and gas out of everyday use, they are far from reaching worldwide practicality and so it could be assumed that XOM is a good, stable choice.
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Too much fluctuation wasn’t expected, neither on the high nor the low side, and was generally thought to be a safe investment seeing as though oil and gas, as of yet, are a necessity to our modern world. There were 46 shares bought at $77.63 each. At the end of a six week period, the shares were valued at $72.13 each. $5.50 was lost per share, $253 in total. The Dow Jones Industrial Average, an index measuring the worth or value of the top 30 US-based companies also known as DJI or the Dow, started at $24,947 and ended up at $24,370.10 over the same six week period losing a total of $576.90. XOM didn’t do horribly considering the loss in the DJI.
Unilever N.V., UN, is a multi-faceted company with their foot in many different products and competitions. They sell everything from facial care products to condiments. Because of their diversity and products for everyday care, it was assumed that the stock would fair well in the stock market since said products are used by the general public on a daily basis. It was not expected to do exceptionally well, but well nevertheless. There were 62 shares bought at $54.75 each. At the end of the six week period, the shares were valued $52.95. $1.80 was lost per share, $111.60 in total. Considering the Dow’s drop of $576.90, the loss in value of stock of Unilever N.V was not anything too dramatic.
The final stock is Costco Wholesale Corporation, COST, which is a warehouse-style seller whose products include food, personal care items, appliances, etc. Buying in bulk is definitely the name of the game when it comes to Costco. It entices customers with low prices and high quantities. It is a well known brand that continues to grow in popularity and it is for that reason Costco was seen as a very safe and profitable investment. There were 13 shares bought at $230.41 each. At the end of the six week period, the shares were valued at $211.46 each. $18.95 was lost per share, $246.35 in total. The loss seems very dramatic compared to the other stocks, but because of the higher starting share price, the loss is nearly proportional to the $576.90 drop in the DJI.
In conclusion, it is clear to see that in this particular period of time, there has been a loss of value throughout the stock market. Although the value has decreased overall, it is important to note that this is the perfect time to invest. Because of the decreased value, it is possible to make big profits when the stock market recovers. In the future, more attention should be taken to the good and bad press of the company and the products and/or services the company bases itself on. More care should be taken to spread your money evenly to maximize profit-making potential.
Trying to figure out whether or not to make a decision, any decision, is the perfect real life application of this skills gained through this six week period. One must examine all possible outcomes and all options heavily before deciding what to do. While tracking the stocks every week for six weeks was an admittedly laborious task, it was a great eyeopener to how money works. Investing in stocks is now a viable option and not some foreign idea too abstract and convoluted to comprehend.
