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G
L O S S A R Y |
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04.19.2004
Observations and Activities.
Observations:
- Sometimes stock go up and sometimes they
go down. This is very normal and shows the market at work.
- Investing in stocks involves taking a
risk, because the price could go down.
- In the short-run, it is hard to tell
which direction stocks will go. Over longer periods of
time (i.e., several years) stocks are likely to go up.
- Some investments, like a bank savings
account, have less risk. With less risk though, you don’t
have a chance to make as much money.
- If the students had invested in a savings account earning 1% per year they would have made about 4 cents each week so far.
Activities:
Here are a couple of things you might want to try:
- Compare the bar charts for the Dow and
the Nasdaq and answer the question, “Which stock
index had more risk this week?”
The answer is the Nasdaq, because it had bigger price gains and price losses than the Dow.
- There are “animal names”
used to describe good markets like we had at the beginning
of the month and bad markets like we've had the last two
weeks. Do you know the answer? (see below)
- A strong up market is a(n) [elephant] [bull] [deer] market.
- A strong down market is a [bear] [turtle] [fish] market.
Usually these terms are applied to longer periods of time, but you've experienced both types of markets in the last month or so.
ANSWER:
Up market is a "bull market".
Down Market is a "bear market".
- It’s hard to predict the market,
but just for fun, see if you can guess next week’s
Dow and Nasdaq index values. Write it down on a piece
of paper and check it a week from now.
To help with your prediction, you might look at the weekly charts to see how much they have changed.