There’s More To Investing Than You May Think

 There’s More To Investing Than You May Think

Written by: Sanshray Vallecha 

As juniors and seniors in high school, it is integral to start learning how to handle and invest your money. But like me, many people think of investing or only in the stock market. On the other hand, investing is a lot more than just investing in the stock market. Although investing in the stock market is one way to invest your money, there are many more options like investing in property, in a savings account, in a CD, or into retirement plans, just to name a few. The options to invest your money are very vast, but require a lot of research to see where your money is being invested into, how your money will be used, and when you will get your money back. Learning how, where, and when to invest your money can take a lot of time and effort to figure out, but learning some ways to invest your money can reduce that time.

In reality, there are umbrella groupings of all of the ways to invest, and these groupings are not common between different sources. For example, CommSec believes that investments are grouped into four categories: growth investments, defensive investments, cash investments, and fixed interest investments. On the other hand, lifehacker believes that there are three main types of investments: ownership investments, lending investments, and cash investments. They also say that there is another miscellaneous category of investments that don’t really fit into the aforementioned categories. From what I can gather, the main types of investments are offensive investments, defensive investments, cash investments, and other investments. Out of these investments, offensive and defensive investments tend to be the most popular, and there is a lot to gather from just these two types of investments.

Firstly, there are offensive investments. These investments tend to be high-risk high-reward investments that can either last any amount of time, but usually tend to last a long amount of time. Some of these investments include: buying real estate, shares, starting your own business, cryptocurrency, and becoming a venture capitalist. These investments tend to take a couple of years to develop, but can provide large dividends in the future. Also, these investments tend to have a larger percent of interest.  On the other hand, these investments are very volatile and are susceptible to dropping due to market volatility. With buying real estate, it is usually more profitable to wait at least a couple years before selling the property, but on the other hand, it can be very hard to gather the money to be able to afford real estate, and the value of the property can easily drop. One way that people don’t have to pay as much to enter the real estate market is to invest in real estate investment trusts, or REITs. In short, REITs are a nontraditional way for people to invest in property because you pay a company a sum of money and that corporation or trust will use your money and other investors’ money to purchase income properties, and over time some of the profit that the organization makes will come back to you, but if they lose money, then so will its investors. 

With defensive investments, they are usually the opposite of offensive investments, and tend to be low-risk low-reward investments. Also, these investments tend to protect your money from different threats, like bear markets, inflation, and crisis. In the table to the right, you can see common defensive investments with their common defenses. Defensive stocks are stocks that will perform no matter how the economy is trending, and will usually withstand a bear market, where most stocks are dropping in value. These are companies like Walmart, Procter & Gamble, and Coca Cola, that are usually 

international conglomerates that are in the utility, pharmaceutical, auto repair, and alcoholic beverage industries. From the graphs to the right, you can see the decline of the S&P 500 over 2020, when compared to a defensive stock, Walmart, between Q1 of 2018 to Q1 of 2021. These graphs show that defensive stocks can withstand market volatility and how they can be low-risk investments. Another defensive investment is investing in TIPS. TIPS are Treasury Inflation-Protected Services, which are a form of bond backed by the US Treasury. Since inflation is an invisible threat to anyone’s financial profile, it is something that most people don’t think about to diversify their profile. As the name suggests, these services withstand the threat of inflation through maturity. As a TIPS investment matures, the initial money given, the principal, and the interest rates reflect the inflation rates at the time. The downside to TIPS is that if market deflation occurs, the interest rate will drop because it is based on how much the principal is worth, and if there is deflation, the principal will become less valuable.  

Although there are several other types of investments that people can venture into, offensive and defensive investments tend to be the most popular, and are what most investors gravitate toward when starting to build a financial portfolio. From these investments, we can start to think and develop on how we will build our financial portfolios now and in the future. Although many high schoolers believe that all of their take home pay should be spent on whatever they want almost immediately, we should start to invest as early as possible because investments can take a lot of time and money to develop and truly reach its full potential. 

Works Cited

“A Guide to High-Risk Investments.” SyndicateRoom, 

www.syndicateroom.com/investing/high-risk-investments.

Rowan, Kristin Wong and Lisa. “The Different Types of Investments and How They Work.” Two 

Cents, G/O Media Inc., 19 May 2020, 

twocents.lifehacker.com/the-many-different-types-of-investments-and-how-they-w-1683582510.

Sheets, Gregory. “Offensive vs. Defensive Investments.” Www.gregorydsheets.com, 

www.gregorydsheets.com/------Offensive-vs--Defensive-Investments.6.htm.

“What Are the Different Types of Investments?” CommSec, 

www.commsec.com.au/education/learn/investing-basics/what-are-the-different-types-of-

investments.html. 

Stock Market: You wish you would have invested in Zoom stock…

 Stock Market: You wish you would have invested in Zoom stock…

Written by: Maria Opie

Before the covid 19 pandemic, the world was already on a constant search for more ways to become connected. Whether it was through Instagram lives, Snapchat stories, or Facetime, we were constantly video chatting. However, when the pandemic forced everyone to quarantine into their homes, we were forced to only connect virtually. Thus, the rarely used Zoom suddenly became in the spotlight. It seemed overnight Zoom emerged from the background and became at the forefront of every business, school, and organization as people needed ways to connect with one another face to face - but through a screen. Many were, and still are today, very thankful for the resource that allowed us to connect, and continues to allow us to connect face to face through a screen. However, those that are most thankful for Zoom are definitely those that invested in Zoom stock before or at the beginning of the covid-19 pandemic. 

To begin to understand why those that invested in Zoom stock prior to our current pandemic are extremely thankful for Zoom, we must first have a basic understanding on how the stock market works. When someone owns “stock” in a company, it means that they have partial ownership, which represents a proportionate claim on the companies net profit and its assets. Many small companies need to sell shares in order to raise enough capitol in order to lease an office, hire employees, create a distribution network, etc. However, people often buy shares of companies when they feel that company will soon start creating a larger profit. This is because as the company expands and starts to prosper, the price of the stock that they bought will increase because the company's net worth increases. Then, buyers can make a profit if the price of their shares increases by selling their shares to other buyers. 

According to CNBC, when looking at the stock prices of Zoom, Zoom’s stock price increased 569% this year. Which increased its market cap to $129 billion. This market cap puts Zoom larger than the International Business Machines Corp (IMB) and Advanced Micro Devices Inc. (AMD). On August 31st 2020, Zoom reported that the revenue from that quarter, which ended on July 31 2020, increased by 355% when comparing it to that quarter from the previous year. This puts Zooms shares at an increase of 369% since the beginning of the year. This means Zoom’s shares from the beginning of the year are currently booming. 

Let's set up an example to see the profit increase of those that invested in Zoom stock on December 31st of last year. On December 31st 2019, the price of one share was $68.04. Therefore, if a person bought ten shares on December 31st, it would have cost $680.40. However, the current price of one share is $399.90. This means, if that person still owned their ten shares, their shares would have a value of $3,999. Giving them a profit of $2638.56 if they were to sell their shares. Therefore, this is why though the world may be thankful for the connections that Zoom has allowed us to share via the internet during our pandemic, Zoom shareholders are the most thankful for Zoom this year because of the vast money it has made them. 

This image shows the growth of the zoom stock up until its peak period. 

However, as of November 10th, according to investors.com, currently Zoom stock is not currently in a buy zone. They explain that buyers should wait for a new base to form. After the news that a vaccine would be released, stocks began to slightly fall, decreasing by 35% from it's all-time high. However, experts believe that even after the covid-19 pandemic, Zoom will continue to be prominent in business and schools. Even with other competitors emerging into the new market such as Microsoft and Google, Baird analyst William Power explained in a report to clients that, “Zoom has established a significant beachhead [to other companies]” and that "Even with a return to more normal lifestyles, we believe there are a plethora of use cases that will continue to resonate for businesses and consumers, significantly expanding the historical total addressable market," (Krause). This shows that consumers should not sell their shares currently, but rather wait because of the prominent way Zoom has changed the ways schools and businesses are run. Therefore, shareholders that are thankful they bought shares early, should not stress if they didn’t sell their shares during the peak of Zoom stock. They can rest knowing Zoom will continue to grow as the market expands. Either way, investing in Zoom early in the pandemic has made many thankful to Zoom for more than just the connections it allowed. 

Works Cited

Hayes, Adam. “A Breakdown on How the Stock Market Works.” Investopedia, Investopedia, 28 Aug. 2020, www.investopedia.com/articles/investing/082614/how-stock-market-works.asp.

Jordannovet. “Zoom Shares Soar after Revenue More than Quadruples from Last Year.” CNBC, CNBC, 1 Sept. 2020, www.cnbc.com/2020/08/31/zoom-zm-earnings-q2-2021.html.

Krause, Reinhardt. “Is Zoom Stock A Buy Right Now? Here's What Earnings, Charts Show.” Investor's Business Daily, 10 Nov. 2020, www.investors.com/news/technology/zoom-stock-buy-zm-stock-sell/.

Levy, Ari. “Here Are Incredible Stats about Zoom Following Its Blowout Earnings Report.” CNBC, CNBC, 1 Sept. 2020, www.cnbc.com/2020/09/01/here-are-incredible-stats-about-zoom-following-its-blowout-earnings-report.html.

Sun, Leo. “Where Will Zoom Video Communications Be in 1 Year?” The Motley Fool, The Motley Fool, 4 Sept. 2020, www.fool.com/investing/2020/09/04/where-will-zoom-video-communications-be-in-1-year/.

Stock Market Basics

 Stock Market Basics

Written  by: Anthony Bigari 

The Stock Market. It’s on the mind of millions every day. It’s the indicator of the National Economy for many people, and it's also where millions of people put their retirement savings into, whether that be in a 401k or investing on the side.

What is the Stock Market?

The Stock Market is a place where investors (could be major companies, or it could be just a regular person) come to buy and sell stocks and other investments, (shares of a public company). Stocks are just pieces of a company that you can own, and they give back dividends in return for owning that company (cash payments per share of a company).

The Stock Market operates in a pretty simple way: There are exchanges, like the New York Stock Exchange, or the NASDAQ, that companies list shares of their stock (essentially a stock is ownership of a tiny piece of a company). Investors are able to buy these shares and therefore hold ownership in a company. This allows the company to raise money to have more capital in order to do more things with the company. In addition, the exchanges mentioned above allow a owner of a stock to trade their stocks with other investors. The numbers you see on exchanges are the current supply and demand values of these shares.

How do I begin to Invest on the Stock Market?

For starters, as someone under 18 years of age, you are not allowed to invest on the stock market unless you open a joint account with your parents. However, as soon as you turn 18, you can begin to invest on the stock market. I highly recommend opening up a robinhood account via a friend invite, as robinhood will grant you a free share of a stock once registered.

Here’s a video describing how robinhood has helped let younger people get into investing:

In addition, any online brokerage is a fine way to invest in the stock market. There are hundreds of different services available for different types of investors, however I would say to use robinhood as a beginner. There is no minimum price limit, and, most importantly, there are NO FEEs to trade stocks on their exchanges. 

From here, all you need to do is start investing! Find stocks and companies that you think will have long (or short) term profitable gains, that will allow you to make money! The stock market is all about making informed decisions that you believe will profit in the long run, and even the best investors will sometimes lose money. 

Thanks for reading!

The Coronavirus Shutdown Hurts many Companies, but others may have Flourished

 The Coronavirus Shutdown Hurts Many Companies, But Many Others Flourished

By: McKenna Eales

The Coronavirus pandemic affected most people all over the world. When the United States went into lockdown in March many people were experiencing things in a very new way whether it be having to do school or work virtually, no longer having a job, or being quarantined because of having Covid-19 or symptoms of it. When people think of the Coronavirus and the shutdown it caused, many people are filled with negative thoughts or feelings, but the shutdown actually had many positive outcomes too. The Covid-19 shutdown affected many people and companies negatively, but many companies actually began to prosper.   

Here is a helpful link to an infographic that I will be addressing in the upcoming paragraphs: https://www.visualcapitalist.com/covid-19-downturn-beach-stocks/ 

The Coronavirus pandemic hit the travel and entertainment industries, also known as BEACH stocks, the hardest. Some of the largest beach stocks have seen more than $332 billion total evaporate in the past month alone. 

Airlines were affected greatly by the pandemic. Market Capitalization is the market value of a publicly traded company's outstanding shares. On February 19, 2020 to market capitalization of Delta Air Lines was at $37.5 billion and by March 24, 2020 the market capitalization was $17.8 billion dollars, which is a -52% change. United Airlines had a market capitalization of $19.7 billion on February 19, 2020 but by March 24, 2020 had a market capitalization of $8.4 billion, a -57% change. 

Entertainment industries struggled greatly too. Six Flags had a market capitalization of $3.2 billion on February 19, but on March 24, the market capitalization was $1.1 billion a -66% change. On the 19th of February, The Walt Disney Co. had a market capitalization of $255.1 billion and by the 24th of March it was down to $177 billion, a -31% change. 

Market capitalization is a way of measuring the size of a company. Losing market capitalization not only affects the company negatively, but also the shareholders. Shareholders are negatively affected by losing market capitalization in a process called dilution. Dilution results in a decrease of an existing stockholder’s ownership percentage of a company. 

Although many companies, especially companies in the BEACH stocks as I mentioned previously, were greatly hurt by the Covid-19 shutdown, many companies improved greatly. Big tech companies and retailers offering online shopping flourished. 

Amazon had a 70% increase in profits in the first nine months of the years. The added $401.1 billion to their market capitalization. Microsoft's new communication app, Microsoft Teams became a new popular way to keep in touch. One day in April of 2020 there were 75 million people who used Teams, which is up 55 million people from late 2019. Microsoft added $269.9 billion to their market capitalization. 

Apple and Tesla are just two more of the many companies that ended up doing very well from the pandemic. Apple was forced to close all of their 500 stores around the world, their revenues from the opening quarter were strong due to their vigorous online sales. Apple was able to add $219.1 to their market capitalization. Tesla outpace their competitors. As their competitors struggled to rebuild their companies and improve their software, Elon Musk was promising to upend the entire model of car ownership with fleets of self-driving robotaxis that would charge by the mile. Tesla was able to add $108.4 billion to their market capitalization. 

In conclusion, while many companies were on their way to rock bottom, many other companies were rising to the top.     

Works Cited

Eavis, Peter, and Niraj Chokshi. “While the Pandemic Wrecked Some Businesses, Others Did Fine. Even Great.” The New York Times, The New York Times, 9 Nov. 2020, www.nytimes.com/2020/11/09/business/economy/companies-profits-losses-coronavirus.html.

Neufeld, Dorothy. “The Hardest Hit Companies of the COVID-19 Downturn: The 'BEACH' Stocks.” Visual Capitalist, 25 Mar. 2020, www.visualcapitalist.com/covid-19-downturn-beach-stocks/. 

“Prospering in the Pandemic: the Top 100 Companies.” Financial Times, 19 June 2020, www.ft.com/content/844ed28c-8074-4856-bde0-20f3bf4cd8f0. 

How to Get Started in the Stock Market

 How to Get Started in the Stock Market

Written by: John Maki 

The stock market is not for the faint of heart. There are many ways to approach the stock market but the volatility and unpredictable manner in which the stock market reacts to global markets makes the stock market a risky endeavor for investors who are unaware of how to invest properly. The new age we find ourselves in allows us to communicate, share information, and make business transactions in only a few seconds. What used to be done in person on Wall Street, can now be done through devices that connect via the internet. Apps and websites give investors the opportunity to invest from anywhere in the world. There are of course things that should be said beforehand. To invest you need to be 18 years or older, or control the account created by a legal guardian, investing in the stock market is not a replacement for a savings account, and the stock market is not a means to make quick cash.This blog is meant for those who know how good it is to invest in the future but aren’t sure how. With those things out of the way, let's get started.

To get started in the stock market first you have to decide if you would like to be the one to broker your own investments or if you would like someone else to manage your investments for you. There are many avenues to alleviate control of your investments to someone else and it’s better to do your own research to discover the ways to invest that aligns with your long term goals. But doing it yourself on the other hand also involves much research and hard work. Here are a few things to keep in mind when researching a company to invest in, trends in earnings growth, the stability of a company which usually will have modest dividends, relative strength of the company in its industry, look at a company's debt to equity ratio, price to earning ratio, competent management, and the future of the industry the company is in. These factors all contribute to the safety and to the success of the success of your investments in the company. But do keep in mind that the world throws in a lot more variables that oftentimes an investor will not be able to foresee which can greatly affect a company’s success in the short term.

After deciding on a couple companies who have a promising future, it is important to diversify your investments. A diverse portfolio consists of companies whose business does not correlate with one another. If a company’s stocks fall greatly, and the stocks of the other companies don’t also fall is a characteristic of a diversified portfolio of investments. Not putting your eggs in one basket reduces the overall risk of your investments being affected by a single event or the constant economic cycles of expansion and contraction. Stocks tend to be heavily affected by the fluctuations in the economy, bonds and other fixed-income assets are very safe during economic downturns, and foreign stocks in emerging and developing countries are much riskier due to their high growth but also unstable economies. Keep in mind that low risk mutual funds which are professionally managed and also exchange-traded funds are inherently diverse investments. There are options for high-risk options of mutual funds and ETFs, but keep in mind that you’re investing here not betting.

Focus on the long term for investing.While the idea of buying low and selling high is the main goal of any investor, guessing when a stock is going to be low or high in the next few days is not investing. That’s gambling. It is usually a good idea to wait longer than 5 years before selling stock. Which is enough to outlast an economic downturn but also long enough for a company to grow substantially. That was a mistake that I made when I started investing. And hopefully by the end of this, you understand some of the basics of beginning your journey into investing.

Works Cited

Amadeo, Kimberly. “6 Assets You Should Own Now.” The Balance, 11 Feb. 2020, www.thebalance.com/what-is-a-diversified-investment-3305834#:~:text=A diversified investment is a,to the same economic event.

Investing, Kevin | Just Start. “Focus on Long Term Investing.” Just Start Investing, 16 June 2020, www.juststartinvesting.com/focus-on-long-term-investing/.

Josephson, Amelia. “Investing for Beginners: What You Need to Know.” SmartAsset, SmartAsset, 24 Sept. 2020, smartasset.com/investing/investing-for-beginners.

McGurran, Brianna. “How to Start Investing: A Guide for Beginners.” NerdWallet, 30 Oct. 2020, www.nerdwallet.com/article/investing/how-to-start-investing.

O'Shea, Arielle. “How to Invest in Stocks: A 6-Step Guide for Beginners.” NerdWallet, 9 Nov. 2020, www.nerdwallet.com/article/investing/how-to-invest-in-stocks.

“Stock Picking: 7 Things You Must Know About a Company.” U.S. News & World Report, U.S. News & World Report, money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2013/02/22/stock-picking-7-things-you-must-know-about-a-company.

Debit & Credit Cards: What’s the difference?

 Debit & Credit Cards: What’s the difference?

Written By: Cooper Young 

As us juniors and seniors slowly integrate ourselves into the adult world, we find ourselves questioning aspects of adulthood that we were oblivious to. Whether it's a financial or social entity that we just can’t understand-there is always something that has us perplexed as we slowly adjust to accountability for ourselves. One thing that really stumbled me, and still has me confused on occasion, is debit and credit cards. What’s the difference between the two? Why do I need both? How are there different types of money? What is a credit score? Although these questions can be daunting and confusing, I can assure you that debit and credit are nowhere near as complicated as they might seem-they’re just poorly explained to us young adults. 

Let’s start with the most basic form of money and transaction: debit. Debit cards are basically a placeholder for cash. Most people don’t want to carry around cash everywhere they go, thus a debit card finds use. Debit cards pull money right from your bank account, with no other transact
ion fees or hidden issues. You get out what you put in. People might use their debit card to purchase something small and routine like gas or get money from an ATM. Medium one time purchases such as a doctors appointment or restaurants are great examples of what most people do(and should) use their debit cards for. Spenders rarely make big purchases on their debit cards, and most banks have limitations on how much you can purchase, usually around $1,000-$3,000 daily. These limits are to not only protect your money, but the bank as well. A spending limit can stop the damage a thief can do to the balance-ultimately saving your’s and the bank's cash. In its simplest form, a debit card is basically a placeholder for your cash with a few limitations on how much you can use. 

Now credit. Most people my age are confused on how to use a credit card and what its real purpose is. Using a credit card is similar to taking out a loan. You are taking out a loan to pay for something that you want or need. Later down the road, you are then responsible for paying back that money. At the end of each month or billing period, you will receive a statement from your bank with your total amount due, your minimum balance due, and the due date for your payments. If you pay your total amount on or before the due date, you are exempt from paying any interest. However, if you pay less than the total amount before the due date then you will have to pay interest on the remaining balance. This is how banks make their money. The average credit card interest rate is around 17-20%, so paying off your amount in time is a good idea. Despite all of the negativity and obligation, credit cards have lots of benefits. Credit cards allow you to pay for entities that you might currently have the money for. Think of a family living paycheck to paycheck, a credit card would allow them to purchase necessities before their next amount came in. Credit cards also are a safe way to make purchases online with protection from theft. If fraud is noticed, you can easily cancel those purchases with no damage to your savings traditionally. There are some complicated instances where that isn’t the case, but that would only screw readers up by explaining them. A credit card is simply a miniature loan that you take out with each purchase, except the only interest you pay is at fault with your own neglect. 

Finally, credit cards build toward a credit score. A credit score is a monetary score given to every indi
vidual who opens a credit card. This credit score is basically an assessment of how well and responsible you are with credit. Do you pay your bills on time? Do you not overspend? All factors that build towards your credit score. As your credit score increases, your likelihood of you receiving that loan increases. Nearly everyone takes out loans, whether it be student loans, house loans, car loans, or any other loan you can think of. Your approval for a loan, and your interest rate, are determined by your credit score. Although not really useful for us now, credit scores are very applicable as you start making large purchases as an adult. 

Works Cited

moneyunder30.Com, www.moneyunder30.com/debit-card-daily-spending-limit.

CBS News. “5 Purchases You Should Never Put on a Debit Card.” CBS News, CBS Interactive, 2 Nov. 2016, www.cbsnews.com/media/5-purchases-you-should-never-put-on-a-debit-card/.

Fontinelle, Amy. “10 Reasons to Use Your Credit Card.” Investopedia, Investopedia, 10 Oct. 2020, www.investopedia.com/articles/pf/10/credit-card-debit-card.asp.

“What Is a Credit Score?” Equifax, www.equifax.com/personal/education/credit/score/what-is-a-credit-score/.