How To Read The Stock Market?
April 17th, 2010
If you are saving right now and looking for an option that gives higher return than the usual bank deposits, investing in stocks is a great alternative. Holding a stock is a form of ownership in a particular company. Being a stockholder means you have a claim on its assets and earnings. However, the higher the return on investment the greater the risk the investor has to take. There is a greater risk of losing all of your money or part of it. Be ready to invest your money for a longer period of time so you could be sure of positive returns.
It is critical that you know how to read the stock market. So how does a beginner in this type of investment understand the strange jargons and figures? The following identifies every key word present in a stock market table.
52W High and Low. These are the highest and lowest prices traded for the last 52 weeks. It does not include the trading price of the previous day.
Stock. It represents the names of each listed company. It also shows symbols at the end of each name that signify the type of stocks issued. An example is the symbol “pf” which means preferred stock. No symbol at the end of the name means that the stock is a common stock. The most common stocks are the preferred and common stocks. Companies may also issue other types of stocks.
Ticker. It is the code of each company in alphabetical form.
Dividend and yield represent the amount of money that is paid to stockholders in the form of dividends.
Price Earnings Ratio. It is the ratio of the current stock price against the earnings per share of prior four quarters. It connotes probable earnings of your stock investment.
Trading Volume. It is the total number of shares traded within the day.
High and Low. This is the highest and lowest prices of stocks traded on a single day.
Close. It means the last price quoted on the day. The term bold-faced stock could surface and is associated with the closing price. It means the closing price is less than or more than 5% as compared with the closing price of the previous day. However, it is not an indication that the price would be the same the following day because of fluctuation in prices.
Net Change. It is the balance between the current price of stock and the closing price of the previous day. A stock referred as “up for the day” has a positive net change.
These are the terms that can definitely help you in understanding what the business is and in how to read the stock market. Actually, these are just a few of them. There are other terms that you also need to understand regarding stock market such as the bull and bear market. A bull market is the time in which investment prices are increasing very fast. It happens as the economy recovers or because of investors who expect that stock prices will rise. On the other hand, a bear market means stock prices are falling and the optimism of investors turns into widespread fear and pessimism that stocks could not recover.
Now that you have acquired the basic knowledge on what the industry is and how to read the stock market, you can now decide if you still want to invest. The internet could help you determine the company you would like to place and entrust your money.
Learning how to read the stock market is very basic for the stock market industry. Anyone who wanted to invest on this business must make sure that he understands this. stock trading newsletter course is another aspect of the business that he needs to learn.