OIG Stock tutorial- Basics of Investing

Thank you coming to our second meeting. We had a full house.

Sophia started introducing the market by showing a video about Bear vs. Bull market. She talked about he power of  investing.

  • Investment requires time commitment
  • Investment requires investors do intensive homework, keep up with the latest news and reading all the 10 K, 10 Q reports of different equities.
  • Investing is not gambling. Sometimes, luck can be important in investment. However, investors don’t rely on luck to make rational decisions.
  • Investment involve both benefits and risks.

Lingyi talked about different assets, three different assets we can invest in a vanilla version and a more complex version. For OIG, we only invest stocks.

Lingyi talked about the fixed income as well. There four categories in fixed income, US Credit ( industrial companies issuing debts), US High Yield ( riskier company), Structural Products, Emerging Market Debts( international government). When talked about cash, we also need to take inflation rate into consideration.

 The difference between bonds and equities:

  • Bonds are considered safer because of coupon
  • Equities are issued by companies go public, and the price of stock fluctuates, dividends and transactions are two way investors benefit.

Wanda introduced Market Capitalization, which refers to the total dollar market value of all of a comapny’s outstanding shares, and is is used to determine company size.  She gave examples of Small Cap, Mid Cap, Large Cap and Micro Cap.

We had a small discussion about Penny stocks, which are share that are $5.00 and are traded over the counter. The liquidity of Penny Stocks market is the main reason most investors don’t focused on the Penny Stocks.

Yiran talked about NASDAQ, S&P, Dow Jones. They are all most common indicator of the performance of the stock market. OIG often use them to evaluate the performance of our portfolio. The five year performance of three index showed that the indexs are closely related to the market changes.

Wendy talked baout  international  investment, or investment in emerging markets. They are usually processed through mutual funds, or US traded foreign stocks. The risks involved in International stocks are the restricted access to companies operation status as well as exchange rate.

We will talk about different career opportunities in Finance next week. Hope to see you all again.