Selected topics in The Stock Market

By: Mohamed Hamdy

Agenda

• Volatility

• Stock Market Stages

• Margin Trading Stock Market

• Long Term Investing

• Risk and Diversification

Volatility

A statistical measure of the dispersion of returns for a given security or market index

Stock Market Stages

Stock Market Stages

Stock Market Stages

• Stage one - Bashing

• Stage two - Advancing

• Stage three - Toping

• Stage four - Declining

Stock Market StagesExample

Margin Trading Stock Market

• Buying on margin is borrowing money

from a broker to purchase stock.

• Amplifying losses

and gains to the

same degree

Margin Trading Stock Market• A buying power example:• Let’s say that you deposit $10,000 in your

margin account. Because you put up 50% of the purchase price, this means you have $20,000 worth of buying power. Then, if you buy $5,000 worth of stock, you still have $15,000 in buying power remaining. You have enough cash to cover this transaction and haven’t tapped into your margin. You start borrowing the money only when you buy securities worth more than $10,000.

Margin Trading Stock Market

25%=50%

Long Term Investing

• Long Term Investing requires a plan

• Criteria :• stock is a good value at the time of their

consideration, This is done to try and buy a stock when it is under valued

• The company has been profitable one way a company can express its earnings is to issue a portion of those earnings as a Dividend to its shareholders.

Risk and Diversification: Diversifying Your Portfolio

Diversification is the most important component to helping you reach your long-range financial goals while minimizing your risk. Keep in mind, however that no matter how much diversification you do, it can never reduce risk down to zero

Risk and Diversification: Diversifying Your Portfolio

•There are three main things you should do to ensure that you are adequately diversified:

1) Your portfolio should be spread among many different investment vehicles.

2) Your securities should vary in risk.

3) Your securities should vary by industry.