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The Big Picture An index is a portfolio of stocks which have been selected based on particular criteria. Indexes measure the performance of a segment of the stock market or the stock market as a whole by averaging price changes of the selected stocks. Indexes provide investors, analysts, and economists with a snapshot of market conditions, insight into trends, and data for comparing like markets. Major market indexes are the DJIA (Dow), S&P 500, Nasdaq Composite, Nikkei, and Hang Seng. Bull and bear markets are when the market, or a sector of the market, trends up (bull) or down (bear) over an extended period of time. While stocks occasionally move in unison based on market mood, they generally move independent of one another. Being financially literate in the 21st century requires an understanding of the purpose and use of a market index, and familiarity with the major market indexes. SLIDE 16K Let’s Practice! Select from the following practice activities: Let's Practice: Index Investigation Exploring 21st Century Skills and Issues: Side Trips to the IMF and World Bank Ponder and Predict PRODUCT PREVIEW The global economy is growing fast and it’s very competitive. Every nation wants an active and lucrative world trade. Can one country deny companies from another country access to their markets in order to protect or favor their own country’s products? Why would any country allow free and open access to their markets? What’s in it for them? What are the downsides? Write your predictions, and in the next lesson, find out if you are right! Assign • Blog, debate, discuss: Students, like stock, are an investment. The hope is they continue on an upward trend, gain value, and eventually pay a dividend in the form of a contribution to society. How are you trending? Are you in a personal upward (bull) or downward (bear) market? Will you pay a large and reliable dividend, or an SLIDE 16L
inconsistent, minimal, or no dividend? Tell how you will reinvest in yourself. • To prepare for the next lesson: read Chapter 17 in the student workbook. • Watch business or financial news at least 15 minutes per day: Bloomberg West (www.bloomberg.com/video/bloomberg-west)
The Street Business News (www.thestreet.com) Reuters (www.reuters.com/video/technology) • Each week compare and contrast tweets from students' selected financial journalists. Compare journalists' opinions about events and stories.
307 THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY
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