An overview of reading the stock market

Many people are familiar with the stock market. However, most people are not familiar with terms like “stocks”, “buying and selling of stocks”, “stock market charts, and” bulls and downs. “Even the term” stock market “itself remains a point of confusion for those who are not. I have no financial experience. There are times when they would scratch their heads in puzzlement every time they hear their neighbors complain about low stock prices on the market or if a colleague suddenly gets A big windfall from your stock market investments is that trading in the stock market can lead to booming or bankrupt businesses if these companies have played the “stock market game” correctly. Simply put, Shares are representations of the assets and profits of the company. For shares, this value is divided annually among shareholders in the form of a dividend. As an example, if a company makes a profit of $ 100,000 this year, and it has 20 shareholders with 1 share each, the sha shareholders would receive a dividend of $ 5,000.

Definition of the stock market

The stock market, also known as a “stock exchange,” is a financial institution in which licensed brokers trade company stocks and other securities, including privately traded securities, that are approved for trading by the market. The exchanges can occur physically or virtually. Brokers buy and sell shares based on the needs and requirements of the people and / or companies they represent.

The two types of stock markets are …

• Primary stock market = for the negotiation of initial public offerings (IPOs) and other new issues by sellers and buyers

• Secondary stock market = for the negotiation of existing shares in the market by buyers and sellers

Common Stock Market Terms

Stock market “jargon” is nothing to get confused or intimidated by. To understand trends in the stock market, you must learn certain commonly used terms and be able to evaluate stock market charts. By taking the initiative to learn the basics of the stock market, you will become an informed investor and be able to make good stock decisions.

Let’s take a look at some of the terms you are likely to encounter in the stock market …

Share price = This is the value for which the shares are bought and sold. Factors that directly impact share prices are the position and performance of the company issuing the shares. Another term related to stock price is market capitalization, or simply market capitalization, which is the price of the shares multiplied by the number of shares. Other factors that affect stock prices include current performance and future growth and expansion. Let’s put it in simpler terms. If a company does poorly on the stock market, its stock prices decline in value. Conversely, if these companies perform well, you will see share prices skyrocket in value.

Reading Stock Market Charts = These charts and quotes provide the current status of stock performance. These stock changes can be reflected as “day to day” or “intraday” depending on the trading on that particular day.

52 week high and low = Consists of stock data over a 52 week period. On the report date, you will be able to see the lowest and highest priced stocks during this 52-week period.

Type of shares = Preferred shares would have specific symbols written after the company name. If no such symbols are indicated, the action is a common action.

Stock symbol = Each publicly traded company is assigned a specific abbreviation or letters. These ticker symbols are used so that all companies can appear on the ticker tape. All major US stock exchanges, such as the New York Stock Exchange, NASDAQ, Dow Jones, and the United States Stock Exchange, restrict ticker symbols to 1 to 4 letters only (similar to symbols heraldic on British stock exchanges). Any new company must register its own symbols, which must be different from symbols already in use by other companies. Some examples of ticker symbols include AAPL for Apple Computer Inc. and INTC for Intel. You will probably notice that some symbols have a period followed by 1 or 2 additional letters. A good example is BRK.B. This means that the share is being offered by the Berkshire Hathway Company and is a lower priced “Class B” share.

Dividend per share and dividend yield = In a stock market chart, a company is said to be issuing dividends if the two columns are filled in with these titles. Calculate the dividend yield by dividing the annual dividends per share by the price per share. This dividend yield means that the shareholder has a return on his dividends.

Price / Earnings Ratio or P / E Ratio = This value is calculated by dividing the latest share price by the average earnings per share for the last 4 quarters.

Trading volume = Total purchase and sale transactions that have been carried out during the day.

Close = Last quoted price of the share on the day of the close of the stock market

Net change = The difference in stock prices since the last change that occurred. Net change lets you see the direction the stock price is heading, with a plus symbol for a positive direction and a minus symbol for a negative direction.

Bulls and Bears = The term “bulls” and “bears” are economic indicators of the stock market. You have a bull market when stock values ​​go up. This is an indicator of good health in the economy. In a bull market, investors can make substantial profits from the sale of stocks. In contrast, the bear market is indicative of a downtrend, so investors should sell their shares before prices drop much further. During a bear market, many investors and companies tend to lose a lot if they weren’t rushing to buy good stocks and sell them before they fell quickly. The general rule of thumb to follow in the stock market is to buy when prices are low and sell when prices are high (before they go down).

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