Tracking the Market...
How do stock prices change?
What you need:
• stock prices (available in a newspaper or online)
• graph paper
• colored pencils
What to do:
1. You might want to begin by describing to your child what it means to own stock in a company. Buying a share of a company's stock is like buying a tiny part of that company. That share costs a certain amount of money. If a company is doing well, the stock is more valuable and the price of a share goes up. If a company is not doing well, the price of a share goes down.
2. Help your child select three companies to track. You can find the price of a share of stock for each company in the business section of a newspaper or online.
3. Track the stock price of each company over time. You could check the stock price for the same day each month (such as the first or last day) or the same day each week.
4. Use the graph paper to plot how each company's share price changes over time. Use a different colored pencil for each company. Put the dates across the bottom of the graph (on the x-axis) and the share price along the side (on the y-axis).
5. Help your child observe how the stock prices have changed. Did they change in the same way for each company? Did some companies do better than others? Can your child think of any reasons why one company might be doing better than another?
• introduces financial concepts about stock prices
• supports graphing skills