STOCK TRADING (BEGINNERS)

Stocks:

Those who are very new to the stock market, he may be wondering what a stock really is. Very simply, it's a share of ownership in a company. When you own one or more shares of stock, you are called a shareholder, and as such, you are entitled to a representative portion of the company's profits, which are sometimes paid out as dividends.

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Stocks trading types:

There are basically two main types of stock: common and preferred. Common stock represents the majority of stock. It represents ownership in a company and a claim on a portion of profits, or dividends. The dividend amount fluctuates and is not guaranteed. Shareholders are entitled to one vote per share to elect board members, who oversee the major decisions made by the company's management. In the long run, common stock yields higher returns than most other investments.
Preferred stock represents a degree of ownership in a company but usually doesn't include voting rights. With this type of stock, shareholders are usually guaranteed a fixed dividend amount.






Purchasing Stock:

Once you've decided to invest in the stock market, you must decide how you'll buy stocks. There are two main ways to do this. The first is through a full-service broker. Full-service brokers offer you financial planning and advice on selecting investments, and are usually the most expensive way to purchase shares of stock. However, if you don't have the time or know-how to select and manage your investments, it can be a very beneficial arrangement.
The second way to purchase stocks is through a discount broker. These brokers work with investors who are willing and able to research and make their own investment decisions. Discount brokers do not offer financial advice and charge low trading commissions.
Stock Trading:

Most stocks are traded on exchanges. An exchange is a place where buyers and sellers meet and decide on a price. Most exchanges are physical locations, such as the New York Stock Exchange (NYSE), while others are virtual or over-the-counter (OTC). Virtual exchanges consist of a network of computers where trades are made electronically. The NASDAQ is the most popular example of a virtual exchange.

Causes Stock Prices Change:

The price of a stock is generally determined by supply and demand. For instance, if there are more people who want to buy a stock than people who want to sell it, the price will rise. This is because shares of that stock are rarer, and people are willing to pay a higher price for them. The opposite is also true. If there are a lot of shares of stock for sale but no one wants to buy them, the price will quickly drop. Because of these factors, the stock market can appear to have great fluctuations.
Understanding supply and demand is easy. What is difficult to comprehend is what makes people like a particular stock and dislike another stock. Basically, the price movement of a stock indicates what investors feel a company is worth – but don't equate a company's value with the stock price, as that is not always an accurate indicator.
The Bulls and Bears:

Bull market is when the economy is in good shape, the unemployment rate is low, and stock prices are rising. It's easy to pick stocks during a bull market because everything is going up. Beware that bull markets can't last forever, and sometimes lead to disaster if stocks become overvalued.
A bear market occurs when the economy is in bad shape, recession is impending and stock prices take a dive. It is very difficult to pick high-performing stocks during such a time. However, some investors prefer to purchase stock in a bear market, while the prices are low, and stick with them until the prices go back up.
Reading Stock Quotes:

Once you've purchased some stock, it's important to know how to read a stock quote so you can keep track of how your investment is performing.
• Locate the abbreviated name for your stock. It is usually located in the third column.
• The first column (Hi) reports your stock's 52-week high. This is the highest price that has been paid for the stock in the last year.
 The second column (Low) reports your stock's 52-week low. This is the lowest price paid for the stock in the last year.
 The fourth column is the ticker symbol. This is how your stock is identified by the stock exchange.
 The fifth and sixth columns represent your stock's dividend and yield figures, respectively. "Div" is the cash amount that would be paid to shareholders yearly based on the most recent quarterly payment. "Yld" is the cash dividend divided by the closing price of the stock.
 The sixth column is the price-earnings (PE) ratio, which is calculated by dividing the closing price by earnings for the past four quarters combined. This provides a way to compare stock values.
 The seventh column (Vol) shows how many shares of the stock changed hands the previous business day.
 The eighth and ninth columns show the highest (Hi) and lowest (Lo) price paid for the stock on that day.
 The last two columns show the price at which the stock closed for the day (Close) and the net change (Net chg) from the day before.
 Investing in the stock market can be fun, exciting and yes, even a little scary. But arming yourself with some basic knowledge about the market will help you take those first steps toward building your personal wealth.

"TYPE YOUR SEARCH IN TO THE BOX"

"Looking for more information? Use this custom search engine, a joint development by Google and STOCK TRADING. It finds highly targeted results, so you won't be wading through millions of search results"

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