Questions
1. What do you think about Bovespa? Did you enjoy the visit? Was its purposes clear for you?
2. What does a company have to do to enter the stock market?
3. What is an IPO?
4. What is a Stock Index? Give some examples and explain them. (ex. Dow Jones, IbrX-50)
5. What kinds of stock are there in Brazil?
6. What is the difference between “ações” and “opções”?
7. Why do stock prices go up or down?
8. What do you need to do to invest in stock?
9. Explain how the recent financial crisis affected the Ibovespa index.
10. What are some strategies used to decide how, where and when to invest?
1. What do you think about Bovespa? Did you enjoy the visit? Was its purposes clear for you?
2. What does a company have to do to enter the stock market?
3. What is an IPO?
4. What is a Stock Index? Give some examples and explain them. (ex. Dow Jones, IbrX-50)
5. What kinds of stock are there in Brazil?
6. What is the difference between “ações” and “opções”?
7. Why do stock prices go up or down?
8. What do you need to do to invest in stock?
9. Explain how the recent financial crisis affected the Ibovespa index.
10. What are some strategies used to decide how, where and when to invest?
Answers
1. Bovespa is working hard to develop into the world’s best stock exchange. It also does charitable work and has adapted various methods to attract females and other people so that they can invest. Their efforts to develop the companies and the country’s economy are also notable. The visit was very good and the presentation was very informative indeed. However, the purposes were vague to me, mainly because of my inability to understand the language.
2. Companies have to meet the requirements of the exchange in order to have their stocks and shares listed and traded there. Any business that wants to sell shares of stock to a number of different people does so by turning itself into a corporation. The process of turning a business into a corporation is called incorporating.
3. The Initial Public Offering (IPO) for a new public company is the first opportunity for the investing public to be able to purchase shares in the company. An IPO is a very exciting time for the company, and IPOs are often eagerly anticipated by the investing public as well. To have their shares traded on stock exchanges, companies had to go public.
The first procedure for the company to go public is to go with the application for company registration at the Securities Commission (CVM), which is the regulator and controller of the Brazilian capital market.
Only companies that get this record
may have their shares traded on the exchange.
4. A stock market index is the delineation of the relative value of stocks that make up a particular market sector such as heavy industry, technology, telecommunications, healthcare, etc. A stock market index is, therefore, composed of the combined performance of a certain aggregate of individual publicly-traded company stocks best representing that specific sector of the market. Standard and Poor’s 500 Index (S&P 500), which tracks large- and mid-cap U.S. stocks, is one of the better-known examples of a stock market index. Perhaps the most widely quoted stock index is the Dow Jones Index. MSCI World is another popular one.
5. Brazil Bank Stocks, Brazil Chemical Stocks, Brazil Energy Stocks, Brazil Food Stocks, Brazil Mineral & Metal Stocks, Brazil Paper Stocks, Brazil Telecom Stocks, Brazil Transportation Stocks, Brazil Utility Stocks. The best company shares are of PETROBRAS.
6. The opções market is intended to protect investors from volatility of stock prices. The opcoes market gives an option to automatically sell or buy shares after a particular period of time. Ações buys rights to buy or sell a stock at a certain time of exercise and pre-established price.
7. Stocks move in response to supply and demand. Each company authorizes a specifice number of shares that are issued for the company. As more people attempt to buy this stock the price increases. (If more people are attempting to sell, the price goes down. The company's financials, future prospects for profit and P/E ratio all play a part in whether there is a demand for the stock or not.
8. There are two ways to purchase stocks - investors can either use a brokerage, or buy their stocks through Direct Investment Plans or Dividend Reinvestment plans.
9. The most immediate and severe impacts of the global financial crisis in Brazil were felt in the currency. The selling movement dropped the Bovespa index by almost 60 per cent in the
period; and the – also panicking – buying operations of hard currency by Brazilian large, export corporations in
order to close hedge operations built to compensate for the until then long term Real appreciation. The global financial crisis and the effects commented above have hit a Brazilian economy in its most prosperous
moment in 30 years.
10. A person should invest in a diversified mix of stocks, bonds, and money market funds. A person buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. Vanguard.com, Fidelity, TIAA-CREF, and DFA are good sources. Buy no-load, low cost funds. If a person likes to invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give him an idea of how to do "Asset Allocation," determining how much to put in each type of fund.
If a company offers a 401K plan at work, the person should try to invest the most he can. The money grows tax free, and some companies will match his contribution. Investing in a mutual fund IRA is also a good idea. If he has children, he may want to consider a 529 plan or other college savings plan that grow tax free.
Index funds are also good because of their broad diversification, and the person is less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, its good to put~70-80% of your money in the Vanguard Total Stock Market Index Fund and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are.
If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.
1. Bovespa is working hard to develop into the world’s best stock exchange. It also does charitable work and has adapted various methods to attract females and other people so that they can invest. Their efforts to develop the companies and the country’s economy are also notable. The visit was very good and the presentation was very informative indeed. However, the purposes were vague to me, mainly because of my inability to understand the language.
2. Companies have to meet the requirements of the exchange in order to have their stocks and shares listed and traded there. Any business that wants to sell shares of stock to a number of different people does so by turning itself into a corporation. The process of turning a business into a corporation is called incorporating.
3. The Initial Public Offering (IPO) for a new public company is the first opportunity for the investing public to be able to purchase shares in the company. An IPO is a very exciting time for the company, and IPOs are often eagerly anticipated by the investing public as well. To have their shares traded on stock exchanges, companies had to go public.
The first procedure for the company to go public is to go with the application for company registration at the Securities Commission (CVM), which is the regulator and controller of the Brazilian capital market.
Only companies that get this record
may have their shares traded on the exchange.
4. A stock market index is the delineation of the relative value of stocks that make up a particular market sector such as heavy industry, technology, telecommunications, healthcare, etc. A stock market index is, therefore, composed of the combined performance of a certain aggregate of individual publicly-traded company stocks best representing that specific sector of the market. Standard and Poor’s 500 Index (S&P 500), which tracks large- and mid-cap U.S. stocks, is one of the better-known examples of a stock market index. Perhaps the most widely quoted stock index is the Dow Jones Index. MSCI World is another popular one.
5. Brazil Bank Stocks, Brazil Chemical Stocks, Brazil Energy Stocks, Brazil Food Stocks, Brazil Mineral & Metal Stocks, Brazil Paper Stocks, Brazil Telecom Stocks, Brazil Transportation Stocks, Brazil Utility Stocks. The best company shares are of PETROBRAS.
6. The opções market is intended to protect investors from volatility of stock prices. The opcoes market gives an option to automatically sell or buy shares after a particular period of time. Ações buys rights to buy or sell a stock at a certain time of exercise and pre-established price.
7. Stocks move in response to supply and demand. Each company authorizes a specifice number of shares that are issued for the company. As more people attempt to buy this stock the price increases. (If more people are attempting to sell, the price goes down. The company's financials, future prospects for profit and P/E ratio all play a part in whether there is a demand for the stock or not.
8. There are two ways to purchase stocks - investors can either use a brokerage, or buy their stocks through Direct Investment Plans or Dividend Reinvestment plans.
9. The most immediate and severe impacts of the global financial crisis in Brazil were felt in the currency. The selling movement dropped the Bovespa index by almost 60 per cent in the
period; and the – also panicking – buying operations of hard currency by Brazilian large, export corporations in
order to close hedge operations built to compensate for the until then long term Real appreciation. The global financial crisis and the effects commented above have hit a Brazilian economy in its most prosperous
moment in 30 years.
10. A person should invest in a diversified mix of stocks, bonds, and money market funds. A person buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. Vanguard.com, Fidelity, TIAA-CREF, and DFA are good sources. Buy no-load, low cost funds. If a person likes to invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard.com has an on-line questionnaire which will give him an idea of how to do "Asset Allocation," determining how much to put in each type of fund.
If a company offers a 401K plan at work, the person should try to invest the most he can. The money grows tax free, and some companies will match his contribution. Investing in a mutual fund IRA is also a good idea. If he has children, he may want to consider a 529 plan or other college savings plan that grow tax free.
Index funds are also good because of their broad diversification, and the person is less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, its good to put~70-80% of your money in the Vanguard Total Stock Market Index Fund and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are.
If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.
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