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1) Purchase ten stocks (you can include mutual funds and bonds if you prefer) 2) Spend $10,000.00 for each stock (You could do 20 stocks by $5,000.00) 3) Three sectors (you can choose 4, 5, or 6 sectors if you prefer) 4) At least two stocks from small cap, mid cap, and large cap Step № 1 Find Ten Stocks 1) 2) 3) Dow Jones Industrial Average (most popular index. Consists of 30 large cap companies) S & P 500 (Consists of 500 large, mid and small cap companies) Russell 2000 (Consists of 2000 small cap companies) 4) Barron’s Blog - Stocks To Watch The latest headlines Step № 2 Calculate “How many Shares can I Buy?” 10,000.00 ÷ “Cost of 1 share” = how many shares to buy *One share of Ford stock is $11.66 10,000.00 ÷ 11.66 = 857.632 (round to the nearest 1) 858 *I can buy 858 shares of Ford stock Step № 3 & Step № 4 Diversify with at least three sectors and cap size As your students are choosing stocks for their portfolio, they should be including the sector/industry and cap size. I will use www.finance.yahoo.com for this example. Enter F (F is the ticker symbol for Ford) Click on Profile to find sector/industry Market Cap: 46.42 billion Headlines would be found right below this chart Ford is a Large Cap Company Profile Sector Industry Ford Sector: Consumer Goods. Industry Auto Manufacture Step № 5 (optional) I have my students read the headlines of each company to gain some incite as to what is currently happening Vocabulary Market Cap: the total dollar market value of all of a company’s outstanding shares (# of shares • stock price = market cap). *Large cap: market cap of 10 billion or more *Mid cap: market cap between 2 billion and 10 billion *Small cap: market cap of less than 2 billion Sector: is an area of the economy in which businesses share the same or related product or service. Industry: the manufacturing or technically productive enterprises in a particular field, country, region, or economy viewed collectively, or one of these individually. A single industry is often named after its principal product; for example, the auto industry