Stock_Market - RicoJia/notes GitHub Wiki

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1. own x/Y percent shares, dividend is the amount shareholders get paid. From the net profit, usually on a quaterly basis, several cents per share u own.
   • Dividend is optional: large companies have fairly stable dividend, small companies, dividend will be put back into company . Companies may not choose to pay dividend
   • As a shareholder you can vote on chairman of the board. Like Hathaway, once a yr at the headquarter
   • invest in "diversified portfolio", index fund (cash into stocks?)
2. Bond vs stock:
   • stock is a share of a company (equity of the company), bond is a debt, you pay me x amount with interest by Y date
   • bond will have an interest rate
   • coupon rate: percent u get every yr, and you will get all money back at the end of some yr.
   • bond is not equity? but can be bought and sold
   • gov bond is much safer
   • "time horizon"
3. Index: a group of companies, and they have "points", appreciate/depreciate, SP 500 and Dow Jones
   • usually geographic
   • Dow Jones: 30 "blue-chip" stocks, very old, the powerhouse of the United States
   • What are these points?
   • annualized return : x% over a long period of time
   • S&P 500: representation of US economy, more diversified
   • TSX: 235 companies in Canada
4. IPO: initial public offering
   • before IPO, private companies, raise funds thru funds.
   • After IPO, stocks are exchanged publicly, funds are raised globally
   • Public companies need to report financies, private just worries about IRS and CRA
   • Market opens 9:00am - 3:30- https://littleosbook.github.io/

• https://github.com/cfenollosa/os-tutorialpm worldwide
  • Price quote is what the last price was by 3:30pm. But the price is fluctuating all the time.

5. Stock trade: Two types of stock trades: market order, limit order
   1. market order: buy/sell shells instantly at any price depending on the last quoted price.
   2. limit order: will be executed only hitting the price.
   3. if everybody tries to "get out", i.e, selling their shares, the market value of that stock will go down.

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1. Angel Invest, then ABCD, usually not focused on the return, opposite of venture capitalist

   • "portfolio company": to be invested in, held by private equity, like Accel Robotics. Portfolio showcases their products, etc.

2. Shareholder structure: 20%

3. Stock chart price chart:

   • candle sticK:

   

   • Red candles means the closing price is lower than the opening price.

     

     • the opening price is the price of the first transaction. So may not be the same as the closing price of the previous day
     • smallest time unit is 1 min.
     • In real life, some ppl may set an automatic buying value on Tesla

   • Usual chart, just the closing points

   

4. When to buy: simple technique: draw a "channel" where the stock fluctuates in.

   

   • it may get stuck in one region if the industry is moving slow. It's called "consolidation"
   • the upper line is called Resistance, lower line called Support

5. Liquidity

   • volume is how many shares are being traded over a period of time.
   • liquidity means How easy to cash your stock out. So if the volume of a stock is too small, you can't sell a large number of stocks all at once. Real estate: you have to wait, bid, etc. to sell at your price. so Iliquid
     • liquidity: buy and sell
   • Volume is an important indicator of How many ppl believe the current trend is gonna continue. If there's a 5% drop, the volume may stay the same, that means ppl believe this trend is temprorary. If volume goes up, the current trend may go up. Else, will go down.

1. every year 19500 max

• 60 can take, 70 must take
• before 60, if take money out, fine (matched amount + returns)*0.1
  • with traditional 401k, (本金)*0.1
• company matched amount is before tax

2. Individual Retirement Account (IRA)

• annual deposit Roth + IRA < 6000

3. Roth 员工将资金存入Roth IRA的时候需要缴纳个人所得税

• Can't do roth if annual income > 139,000
• Can take cash out after 5 yrs, no fine. But cannot deposit again
• 另外还有一点是Roth IRA是可以由配偶子女直接继承，即不需要取出资金

3. How to choose: 401k with match > IRA till max > 401k

• Traditional IRA:
  1. High income
  2. Think 30 yrs later tax rate < now; High chance to take money out
• Money flow: 401k -> Traditional -> Roth

4. Roth back door - 家庭年收入大于203000的家庭， 1.新开一个Traditional IRA并将资金存入 2.将这个Traditional IRA账户转换成Roth或者将里面的资金转移到一个已有的Roth IRA。

1. Bond - borrow ur money, like the gov. Good for conservatives
   • Corporate fund: 根据信用，high grade fund,
2. Treasury Fund: 国债，T bill

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• Types:
  • ETF: buying a basket of stocks, bonds, assets. Stocks and ETF's prices can fluctuate
• Market Types
  • Market: Executes at the current market price
  • Limit: Executes at a price you specify or at a better price
  • Stop: Once the stop price is met, the order becomes a market order and executes at the current market price
    • turns into a market order, which is executed as soon as possible
    • So no price specified
    • Difference b/w price and your set-price is called slippage
  • Stop limit: Once the stop price is met, the order becomes a limit order to execute at the limit price or at a better price
• How long the order needs to be active:
  • Day: Valid through the current trading day
  • Good 'til canceled: Remains active for 1 year unless it is filled or canceled
  • On the open: Executes as close as possible to the market’s opening price
  • On the close: Executes as close as possible to the market's closing price
  • Immediate or cancel: All or part of the order executes immediately or is canceled
• ProShares Trust ProShares Short S&P 500: betting in decline in value of S&P500
• May not track long term effects
• VOO: the performance of the S&P 500 Index, safe

• CD account, remain untouched until may 31, expect 5% ish interest?
• 5.12%, 8 month CD account: First 10 days. 5.25%