KEEPING UP WITH THE [DOW] JONESES
OVERVIEW
Students will learn basics of the stock market and use information from newspaper stock market pages to compute and graph changes in price over time, calculate dividends, and commissions,. They will participate in a Webquest, using the Internet to learn about stock market basics, access stock prices and company information.
GRADES: 6 - 12
SUBJECT MATTER: Math or Business/Economics with extensions to Social Studies.
CURRICULAR USES: Operations with fractions, decimals; fraction – decimal equivalents; percentage; creating bar and line graphs; reading bar and line graphs; using a word processer application; using Internet sites to locate information. Optional: enter data into teacher-prepared spreadsheet, or students creating their own spreadsheet, including creating bar and line graphs; creating a web page.
LEARNING OBJECTIVES
The student will be able to:
Mathematics 6.1, 6.6, 6.7, 6.18, 7.1, 8.4, 8.13
Computers & Technology C/T 5.2, C/T 5.3,
C/T 5.4, C/T8.1, C/T8.2, C/T8.4
PROCEDURES FOR TEACHERS
PREP
Students should already be able to perform operations with fractions and decimals, find fraction/decimal/percent equivalencies, and find percentages.
The following Internet sites provide resources for those not familiar with the stock market.
Invest FAQ: Article Index http://invest-faq.com/articles/index.html
About the NYSE http://www.nyse.com/about/about.html
Choose "Education," then "Educational Publications"
MATERIALS
The following web sites will be used in this lesson; please bookmark them for easier access. Note: all links are valid as of September 8, 2000.
Keeping Up with the [Dow] Jonses Webquest
http://www.geocities.com/Athens/Forum/4817/ntti/keepingup.html
Webquest, links to all websites, all materials, and teacher page for
this lesson can be found here.
InvestorWords Investing Glossary
http://www.investorwords.com/
Glossary of 5000 investment terms accessed from an alphabetical index.
NYSE (New York Stock Exchange)
http://www.nyse.com/
The home page of the New York Stock Exchange. This site has a ticker,
market summary, links to listed companies, virtual tour of the trading
floor, glossary and educational resources.
The Stock Market (Buying and Selling) [How It Works]
http://library.thinkquest.org/3088/stockmarket/howitworks.html
Picking a Stock (What is a Stock)
http://library.thinkquest.org/3088/stockmarket/whatisastock.html
Picking a Stock (Types of Stock)
http://library.thinkquest.org/3088/stockmarket/typesofstocks.html
Picking a Stock (Tracking)
http://library.thinkquest.org/3088/stockmarket/tracking.html
Market Trends
http://library.thinkquest.org/3088/stockmarket/markettrends.html
Part of EduStock, a ThinkQuest web tutorial site, these pages
teach stock market basics. There are other pages here which could
extend this lesson.
StockMaster
http://www.stockmaster.com
Search by company name or symbol. StockMaster provides quotes, charts
(price and volume), company profiles and financials, news and guru analysis.
Users can select period of time for graphs, an index such as the DJIA or
S&P500 for comparison, and log+, log or linear scales. "My Portfolio"
allows users to track favorite stocks. A "What If" features shows what
a $10,000 investment in a given stock made in 1990 or later would be worth
today.
BigCharts
http://www.bigcharts.com/
BigCharts allows the user to look up companies by name or symbol and
get quotes, company information, and a quick chart or interactive chart
over various time periods from 1 day to 10 years, with printer friendly
versions. Users can also make a list of favorite stocks. BigReports lists
stocks with largest percent gain/loss, new yearly high/low, most active,…
Hoover’s Online
http://www.hoovers.com/
An authoritative source for business information, Hoover’s provides
"Company Capsules" which list the company’s address and phone number, key
people, key numbers, stock chart, fiscal year sales, net income, number
of employees, annual report and more.
COMPUTER RESOURCES
Computer lab with one computer with Internet access, word processing
and spreadsheet applications per student, pair or group of students
Computer (in lab or classroom) with Internet access, word processing
and spreadsheet applications and connection to large monitor or projector
desirable
STEPS
I. Introduction
Begin by asking the students "What is a market?" and write responses on the chalkboard or overhead. The ask, "Name some types of markets." List them with the first responses. Also ask them "What is an auction?" Talk about their responses.
Explain that "Stock is ownership in a company. Companies sell 'shares' of their stock to raise money for various purposes. When we buy stock, we become part owners – even though often it is a very small part. A stock market is where this buying and selling takes place."
Say to the students: "You may be wondering why you should learn about the stock market since you are young and don’t have a lot of money. You have just inherited some stock from your Uncle Otto and in order to keep it you must become a successful investor! Your Uncle Otto left you some stock, with the provision that your Aunt Helen must sell the stock, keep 10% of the money she gets after paying the stockbroker's commission, and divide the other 90% equally between the 5 neices and nephews. Before you get your money, you must investigate the stock market and convince Aunt Helen that you have made wise, well thought out decision."
Give out copies of Uncle Otto's letter (or make a transparency and show using an overhead projector.)
II. Background – understanding stocks and the stock market
Distribute the "Wall Street Basics" activity sheet. Tell the students, "The people on Wall Street often use terms we are not familiar with. Use the web sites listed on the "Wall Street Basics" to learn some Wall Street language and some stock market basics. Answer the questions as you visit the web sites." .
III. Reading the Stock Market Tables
Say to the students: "First, we learned some basics – what the stock market is and what stock is. Now we will look at how this trading takes place and learn to read the stock market information in the newspaper."
Distribute one or more newspaper stock pages (NYSE listing) and a copy of the "Reading the Stock Market Page" activity sheet to each student or pair of students. (Students can later exchange newspaper pages to get another date.) Students can work individually or in pairs to complete the "Reading the Stock Market Page" activity sheet. If students work in pairs, one student can read the stock market page while the other records information for the first half of the activity, then reverse roles.
Optional: Students can get information on how to read market tables by visiting the Education section of the About the NYSE website at http://www.nyse.com/about/about.html . From this page choose Education, then Educational Publications, then "You and the Investment World"; under Chapter 4 The Educated Investor, choose "Reading the Stock Table".
Using the top portion of the "Reading the Stock Market Page", explain the parts of the listing – name, dividend, sales, closing or last price, change, high, low for year. Remind the students, "Look at the column headings. Notice that 'Sales' also says (000s). This means that the sales are reported in hundreds, so we need to add two zeros behind those numbers, so 257 means 25,700 shares traded."
Remind students also, "There is an explanation of how to read the listings included in each day's newspaper."
Say to the students, "There are numerous companies whose names are listed more than once. This is because they offer both common and preferred stock. The first listing is the common stock, which is the one we are interested in. The rest are various issues of preferred stock, often noted with a pf a or pf b."
Demonstrate how to find the price on the previous trading day using the "last" price and reversing the gain or loss in the change column. Start with simple numbers such as a "last" price of 18 ¼ and a change of + 1 ½. Students may need a reminder to get common denominators, and of regrouping necessary for subtraction or when addition results in an improper fraction.
Have the students complete the "Reading the Stock Market Page" either individually or in pairs. Check that students understand the processes involved by circulating among the students, spot checking answers and answering questions as needed..
After the students have learned how to read the newspaper stock market page, if cable television is available, let them watch a financial channel such as CNBC for a few minutes. Let them watch the ticker and see the current status of the Dow, AMEX, NASDAQ, and perhaps listen to a summary of market activity or a news story concerning a particular company.
If you have a large screen monitor with a computer attached and an Internet
connection, take students on a virtual tour of the NYSE trading floor (or
have the students explore on their own) by visiting this website:
NYSE Trading Floor
http://www.nyse.com/floor/floor.html
Click on the "On the Floor" link in the navigation panel at the left
of the screen. On this screen you will get a "map" of the trading floor.
By clicking on the map and dragging, you explore the various areas. You
can click on the orange dots or select from the drop-down menu to see the
floor from various views.
IV. Keeping Up
Say to the students: "We have now learned some basics about the stock market and have learned how to read the stock market tables in the newspaper. You observed that stock prices go up and down, so now we are going to look at tracking the changing prices of stocks."
Give students the "Tracking Stock Prices" activity sheet (and graph paper if desired). Using the chalkborad or overhead projector, work through the first two – Kellogg and go.com – as examples. Then ask for volunteers or select students to work the other problems (one problem per sudent) at the chalkboard while the class work the same problems at their seats. Be sure that students understand the processes involved by checking the students' board work and having the class check their answers.. Then instruct the class, "Now choose 4 more companies and fill in the data for them."
After completing this chart, choose 3 companies (or let the students choose), and create bar graphs comparing the two prices for the companies. Graphs could be sketched on notebook paper or drawn on graph paper, or could be created on computers using a spreadsheet. Using one of the problems worked on the board or overhead previously, sketch the bar graphs to compare the two prices. Say to the students "Create bar graphs, drawing side-by-side bars, comparing the two prices for each of 3 companies we have chosen. You may use two different colors to indicate the first and second price for each company. Choose appropriate units to use for graphs." Also indicate whether they should sketch them on notebook paper, draw on graph paper, or use a spreadsheet.
V. Stock Market Simulation Activity
Students will invest their inheritance in 3 to 5 stocks of their choice. This may be done individually, in pairs, or in teams of 3 to 4 students. If they need assistance in determining how much money they have to invest, use the "How Much Will I Inherit?" activity sheet or guide them through the process.
Say to the students "Now it is time to find out how much you have inherited. Refer to Uncle Otto's letter to see what stocks he left you. Then use the websites he suggested to find out their value. If you need help figuring out how much your share will be, there is an activity sheet available to guide you.
Once they have calculated their inheritance, say to the students, "Now
that you know how much money you will inherit, you must research and choose
companies in which to invest. Using your knowledge of products
and companies, and information from the web sites you are given, decide
on 3 to 5 companies to invest in and how much of your money to invest in
each stock. You will need to look at performance over the last 5 or so
years. You are to track your stock picks by checking the price
of each company once a week over the next several weeks and graphing the
weekly changes in the prices. You will also record the value of each
of your stocks and the total value of your portfolio each week."
(I recommend tracking weekly over a period of 6 to 8 weeks.)
If students need assistance getting started, discuss some companies they
are familiar with such as Burger King and MacDonald's, Pepsi and Coke,
Nike and Converse. Lead their thinking about comparing companies
with questions like: "Which of the rival companies do you think has a better
product? ... seems to have what customers want?
... is likely to continue being popular and making profits? "
This activity concentrates on the New York Stock Exchange since the majority of companies that students will recognize are listed there. You may choose to limit students to only NYSE companies or let them choose companies from any stock exchange. If a company cannot be located, it may be because it is owned by another company, eg. Pepsi owns Taco Bell. Pizza Hut, and Kentucky Fried Chicken, or it is privately owned, eg. Ukrop's.
Students can get near real-time quotes and research companies using the following web sites:
StockMaster
http://www.stockmaster.com
Quotes, charts, company profiles and financials, news
BigCharts
http://www.bigcharts.com/
Company information and graphs of stock performance
Hoover’s Online
http://www.hoovers.com/
Company’s address and phone number, key people, key numbers, stock
chart, fiscal year sales, net income, number of employees, annual report
and more.
Morningstar.com
http://www.morningstar.com
This is one of the places recommended by the pros. Market information,
quotes and reports, stock selector and fund selector, and much more.
InvestorGuide.com Public Company List
http://www.investorguide.com/main.html?tab=2&links=researchlinksframefiller.htm&content=
http%3A//www.investorguide.com/StocksA.htm
Links to company web sites, research links, and
discussions about the company for 6000+ publicly traded companies.
CULMINATING ACTIVITY
Compare the results of investing the same amount of money in the stock market (use results from some of the stocks chosen by the students) with depositing the money in a bank at the current interest rate. Does buying stock guarantee that we will make money?
Celebrate the students or teams whose portfolios showed the greatest
increase by presenting them with certificates, having a special morning
announcement made, giving them a small prize, or other celebration that
may be appropriate for your class and your school.
EXTENSIONS