We’ve been working with families in Sarasota and beyond across multiple generations to safeguard and grow their wealth and help them reach their financial goals. One reason we form lasting relationships with clients – we make talking about their investments simple. Fear of the unknown need not prevent you from studying the financial pages and understanding the evening stock reports on your favorite radio or TV station. A short course in “Wall Street Speak” can help unlock the wealth of information provided by these investment-reporting vehicles.
The Stock Tables
The three major national stock markets that report stock performance for the previous trading day are:
The New York Stock Exchange (NYSE)—The largest and oldest stock exchange in the United States, through which NYSE-listed securities are bought and sold on an auction basis.
The American Stock Exchange (AMEX)—The second-largest U.S. stock exchange, also operating on an auction basis. Trading volume on the AMEX is much smaller than on the NYSE.
National Association of Securities Dealers Automated Quotations (NASDAQ National Market)—The major over-the-counter (i.e., non-exchange) market for the trading of securities of more than 5,000 companies that generally are smaller or newer than the companies listed on the NYSE or AMEX. Trading is conducted through a telephone and computer network among dealers who are members of the National Association of Securities Dealers, Inc. The volume of NASDAQ trading always exceeds that on the AMEX and generally exceeds that on the NYSE.
Other smaller regional stock exchanges are the Boston, Cincinnati, Midwest (Chicago), Pacific (San Francisco or Los Angeles), and Philadelphia stock exchanges.
Stock Indexes and Averages
There are several useful measures of value changes in representative stock groupings. A sampling includes:
The Dow Jones Industrial Average (DJIA, or theDow)—An average of 30 major stocks that many use as a reflection of overall stock market action.
Standard & Poor’s 500 Index (S&P 500)—A broad-based measure of market activity based on the performance of the stocks of 500 of the largest companies.
National Association of Securities Dealers Automated Quotations Composite Index (NASDAQ Composite Index)—An average of the trading in approximately 5,000 over-the-counter stocks not traded on exchanges.
Other commonly used measures include the NYSE Composite Index, the Russell 2000 Index, and the Wilshire 5000 Equity Index.
Decoding the Tables
For an understanding of stock table coding, here are some helpful definitions:
52 Weeks/Hi Lo—Highest and lowest prices reached over the previous 52 weeks, but not including the latest day’s trading.
Stock—Each stock is listed in alphabetical order by full or abbreviated name. Local stocks are sometimes printed in boldface type.
Sym—Stock symbols (trading symbols) of one to five letters used to identify companies on the securities exchange or other market on which they trade.
Div—Annual dividend per share, based on the most recently declared dividend.
Yld %—The stock’s dividend yield determined by dividing the annual dividend by the trading day’s closing price.
PE—Price-earnings ratio of the trading day’s closing market price to earnings per share over the most recent four quarters.
Vol 100s—Total daily shares sold volume, quoted in hundreds (two zeros omitted).
Hi Lo Close (or Last)—Highest, lowest, and last price at which the stock traded on the trading day.
Chg (or Net Chg)—Change from the previous day’s closing price to this trading day’s closing price, normally quoted in eighths of a point (which was changed to a decimal system beginning in 2000).
It is helpful to look for explanatory notes regarding the coding used on Highs, Lows, Dividends, PE ratios, or other topics. You will also find figures of total daily volume and most actively traded stocks for each major national market and the performance of various stock indexes.
As you read the financial pages regularly, you will become more “fluent” in “Wall Street Speak,” a language that will help you gain knowledge about the world of investments.
This material is intended for educational and informational purposes only. It is not intended to provide specific advice or recommendations for any individual, nor should it be construed as tax advice. Additionally, you should consult with your Financial Advisor, Tax Advisor or Attorney on your specific situation. The views expressed in the material are that of the author and do not necessarily reflect those of any market, regulatory body, State or Federal Agency, Association. All efforts have been made to report or share true and accurate information. However, J.L. Bainbridge & Company, Inc., is unable to verify the content and the content is subject to change and become materially inaccurate without notice. For additional information about J.L. Bainbridge & Company, Inc., (CRD # 108058) please visit the SEC Website at www.adviserinfo.sec.gov. For a copy of the firm’s ADV Part 2 Brochure and or Form CRS, please contact us at 941-365-3435.