Wise 1

Shane Wise
Malcolm Campbell
English 1102
13 February 2014
The World of Wall Street

As kids that grew up in a nation wide recession, this generation seems to think
about money a lot. From a young age this generation was taught to make the most out of
the money they had. That new age of kids is growing older now, and they are beginning
to look ahead and think about the possibilities of making more money. One way to make
more is by investing money, particularly in stocks. Stocks allow one to earn more money
basically by living a normal life without any strenuous work or differences to ones
everyday life.
In todays world there are many people that are looking for an easier way and
quicker way to make money. Everyone has different goals and everyone has different
motives and ways to go about reaching them. Investing is all about using the financial
situation one is currently in to its advantage in order to reach future goals. To efficiently
invest in stocks it takes research, analysis and then re-analysis. It is all about helping
yourself out, and jumping in to stocks without proper knowledge can be risky. If
invested correctly, stocks can be very useful in creating a better future. Prior to getting
started, however, one must know a little background information on stocks, learn the
proper way to invest, and devise a customized and effective strategy for their selves.
Mihir 3/21/14 1:21 PM
Comment [1]: Bit awkwaiu
Mihir 3/21/14 1:56 PM
Comment [2]: uoou intio, !"#$%! '() "*) +#$,!
#+ "*-! .'.)( /
Mihir 3/21/14 1:24 PM
Comment [3]: Stiong point, )0.*'!-1) "*-!/
Mihir 3/21/14 1:24 PM
Comment [4]: Not suie what this means
Mihir 3/21/14 1:25 PM
Comment [5]: inseit comma heie
Mihir 3/21/14 1:25 PM
Comment [6]: expanu
Mihir 3/21/14 1:26 PM
Comment [7]: comma heie
Mihir 3/21/14 1:28 PM
Comment [8]: Swap comma with peiiou anu
stait new sentence
Mihir 3/21/14 1:28 PM
Comment [9]: goou stuff, )2.'34/
Wise 2
Before jumping into investment the question to ask is, what are stocks, and why
should I invest in them? Stocks are a type of security that gives stockholders a share of
ownership in a company. Stocks are also call equities (Stocks). One reason investors
use stocks is because of their upside potential. Stocks have potential for strong returns.
They can be bought at a low price and sold at a high price for a very solid profit (Why
Investors Use Stocks). Accessibility is another reason to use stocks. There are thousands
of different stocks that can be invested in. Stock trading is a very convenient style of
trade (Why Investors Use Stocks). The last reason to invest in stocks is because of the
dividends. Dividends are payments given to stockholders. Companies take portions of
their profits and divide it among their shareholders (Why Investors Use Stocks).
The next step to learn about is the five different types of stocks. The first stock is
called an income stock. Income stocks do not usually rise or drop in the overall price, but
they pay large dividends (nyse.com). The next stock is blue-chip stock. Blue-chip stocks
are very reliable. They have long histories of consistent growth no matter the economic
condition (nyse.com). Growth is the third type of stocks. These are shares in young
companies that are experiencing fast expansion compared to industrial companies. They
are riskier than most stocks, but they show much greater potential than other stocks as
well (nyse.com). The fourth type of stock is called a cyclical stock. These stocks are
very consistent with economic trends. If the economy is thriving then so are these stocks
but also vice-versa (nyse.com). The last stock is a defensive stock. These stocks are
mainly very consistent with their price, meaning they do not usually increase or decrease.
Even in a recession period, these stocks will still hold their value (nyse.com).
Mihir 3/21/14 1:29 PM
Comment [10]: comma heie
Mihir 3/21/14 1:31 PM
Comment [11]: I am not familiai with stocks
anu am not suie what exactly this means, got the
iuea though, maybe claiify oi change woius.
Mihir 3/21/14 1:33 PM
Comment [12]: if you aie uefining upsiue
potential tiy to use a moie cleai tiansition to
make suie the ieauei knows the next sentence is
the uefinition
Mihir 3/21/14 1:34 PM
Comment [13]: lot of stiong anu concise points
in this paiagiaph, nice
Mihir 3/21/14 1:56 PM
Comment [14]: A blast of infoimation, maybe
at the enu heie you can vERY biiefly go ovei the
stocks again. You can say how income, uefensive
blue chip as safe wheieas cylical anu giowth can
be moie unieliable. 0i a bettei coiielation that I
cannot see.
Mihir 3/21/14 1:56 PM
Comment [15]: Also not entiiely suie about
the foimat of youi citations, you only useu 1
souice foi the entiie paiagiaph so i think you can
just cite it at the enu. Bouble check with campbell
Wise S
Now that all of the background information is laid out, the next investment step is
to research stocks. It is very helpful to learn about the histories of companies and their
future plans when thinking of investing in them. Obviously, one way to research stocks
is through the Internet. Financial websites, such as NASDAQ, can provide a lot of
information of stocks, including past performance and current performance (How to
Research Stocks). Annual reports are another useful source for stock research. Every
year companies are required to report their financial being to the SEC. These reports are
open to the public, and they give inside information like management policies and future
plans (How to Research Stocks). In addition to annual reports, balance sheets are a very
informative source on companies. They summarize a companys health based on assets,
liabilities, and their net worth. It takes into account loans, taxes to be paid, stock worth,
investments, and many other factors to determine the companys well being (How to
Research Stock). Resources such as these allow one to gain the knowledge needed to
begin investing in a company or companies.
Once a decision has been made on companies to invest in, one must begin a
portfolio. A portfolio is a record of all investments (Mueller). Although a portfolios
main focus is to keep track of your investments that is not all that it does. The first thing
to add to it will be goals that one makes for his/herself (Mueller). Investing should have
a purpose, and if one is trying to make money they should know what that money is for
(Mueller).
To begin investing it is good to diversify among many different stocks. A
portfolio of 12 to 20 different stocks that are researched and chosen well will account for
plenty of diversification (Mueller). This will not be too much for a beginning investor to
Mihir 3/21/14 1:40 PM
Comment [16]: 5!) "*-! '" "*) )34 ,(6-36
7#,( ()'4)( "# 8-)9 !-")! :-%) "*)!) "# -38)!"
-3 !"#$%/
Mihir 3/21/14 1:41 PM
Comment [17]: think the uouble company is
too woiuy, consiuei changing it
Mihir 3/21/14 1:41 PM
Comment [18]: nice closei though
Mihir 3/21/14 1:58 PM
Comment [19]: awkwaiu. Change to maybe,
'that is not its sole puipose' . (oi a vaiiation of
that)
Mihir 3/21/14 1:46 PM
Comment [20]: Compaie to comment 21
Wise 4
handle (Mueller). From here one can adjust his/her portfolio as needed as their
experience starts to grow. More money can be added for more investments or stocks can
be dropped if they are not thriving (Mueller).
A portfolio like that, of course, is a very generic portfolio meant to dip your toe
in the water of stocks. Specific strategies tailored for individuals are a must have before
diving in. There are a wide variety of strategy styles, but a goal assessment and current
financial state evaluation must be made to make a solid decision. An obvious strategy is
buy low and sell high. It can be a risky, but rewarding strategy. Then there are more
stable approaches from the most famous investor himself, Warren Buffett. His methods
are a bit more complicated, and they take more time to work on, but they can be the most
rewarding.
The most known strategy of buying low and selling high has a fairly basic idea. It
is a very difficult approach that very good investors make mistakes with, thus meaning it
is an approach not meant for beginning investors (Strategies for Investing in Stocks).
Buying stocks with a low price can mean one acts as a contrarian, or one who does the
opposite of the majority (Strategies for Investing in Stocks). If a lot of people are selling
a particular stock you may buy, or sell when a lot of investors are buying. You run the
risk of selling a stock that may have huge upside, long-term potential, and buying a stock
that will never recover (Strategies for Investing in Stocks). However, there is also a
chance of completely succeeding and getting an enormous payout with a few stock
purchases and sells.
A more reliable style of investing comes from the best investor of all time,
Warren Buffett. This strategy requires more research and more patience. The first idea
Mihir 3/21/14 1:58 PM
Comment [21]: You shoulu maintain
consistency when using these woius. You useu
they then useu hishei. Not suie which one is
coiiect but I woulu change then all into the same
one.
Mihir 3/21/14 1:48 PM
Comment [22]: inseit 'even' heie
Mihir 3/21/14 1:48 PM
Comment [23]: maybe change this to
expeiienceu. oi anothei synonym of goou
Mihir 3/21/14 1:49 PM
Comment [24]: uelete this to impiove flow
Wise S
Buffett has is to look for a durable and competitive company (Strategies for Investing in
Stocks). A company must have strong management and the ability to create a large profit
over long periods of time. The second is to find a company with competent management
(Strategies for Investing in Stocks). Buffett believes in only investing in companies that
have honest, intelligent managers. He also needs the company to have high customer
retention rates and loyalty (Strategies for Investing in Stocks). His last thought requires
patience. It is to buy at a reasonable price. All of the research may be satisfying, but
until that stock reaches a sensible price for an investor then there is no need to buy at that
time (Strategies for Investing in Stocks). This is a tried, true and tested form of
investment. It is ultimately one of the safest investment types, and it can be one of the
most beneficial.
To conclude, stock investment is a step-by-step process when trying to enter into
the stock market. Research is a key factor in order to know what one is getting into.
Knowing a companys ins and outs is a very important component to investment. Stocks
are not a gamble if enough knowledge is obtained through research. After investments
have been made staying up to date with information on stocks is key. Eliminate the risk
with information and awareness of a stocks performance. The ultimate key to
investment is to obtain enough evidence to prove that a company will grow financially.
Specific and custom made strategies and approaches to stock investment are a must.
Every person in the world is unique, and every person has his or her own financial
situation that must be taken into account while investing. Certain methods will work for
certain investors. The world of Wall Street can be challenging. If not handled carefully
Mihir 3/21/14 1:52 PM
Comment [25]: uieat paiagiaph, makes logical
sense, which is a stiong appeal
Wise 6
it can be very risky and devastating. But, if investment is treated right the proper
investments can create a better life for investors and the people around them.










































Mihir 3/21/14 1:59 PM
Comment [26]: Nice! gieat ieau.
To be honest, it was a bit uiy with the smashing of
facts at the veiy beginning (which is completely
necessaiy anu completely fine) but then pickeu
up quite nicely anu enueu ieally well. Naybe pitch
tiying to buy stocks to the ieauei as a closei.
(just an option, but conclusion was goou IN0)
Mihir 3/21/14 2:02 PM
Comment [27]: Peei Revieweu by :
Nihii vashi
Wise 7
Bibliography

How to Research Stocks. nyse.nyx.com. 2014. Electronic. February 13, 2014.
https://nyse.nyx.com/education/all-about-investing/stocks-how-research-stocks

Mueller, Jim. Getting Started In Stocks. Investopedia.com. January 26,2014.
Electronic. February 13, 2014.
http://www.investopedia.com/articles/basics/07/getting-started-stocks.asp

Stocks. nyse.nyx.com. 2014. Electronic. February 13, 2014.
https://nyse.nyx.com/education/all-about-investing/stocks

Strategies for Investing in Stocks. Massresources.org. 2014. Electronic. March 20,
2014. http://www.massresources.org/investing-stocks-strategies.html

Why Investors Use Stocks. nyse.nyx.com. 2014. Electronic. February 13, 2014.
https://owl.english.purdue.edu/owl/resource/747/08/