What Are The Basics Of Stock Investing?
Stock investing has been popular for a long time as it allows you to invest in a business and benefit from the profits. Many people would like to benefit from the money you have the ability to make from them but they do not have the information they need about the basics of stock investing. In this current climate this is something that many people will want to learn about.
The way stocks work is that if there is a business that is in need of money but does not have the finances, rather than sell the business they sell shares, which when in bulk are called stocks. If the business picks up then you are able to profit and earn a lot more than what you put in, or if the money was sitting in a bank.
You can gain from the profits you put in but there is also a possibility you may not, especially if the business goes bust which is why you will want to invest in something worthwhile.
There are different kinds of stock that you are able to buy and these kinds can be split into two categories, the first being common stock the second preferred stock. Both kinds are subject to a dividend, which is basically an announced payout of a percentage of profits or surplus profits.
Common stock is when you invest a certain amount of money into a business that you feel is likely to profit. The management will decide what percentage of the money you will be able to receive and this can change each time the dividend is announced, this will mean that you can sometimes get more than others.
I can only explain to you the way it is divided by giving you an example. If a dividend is announced and the company has $100'000 in profits then the management decided to give stock holders 10% of this, the 10% would then be divided among all the stock holders, so if you had 50% of the stock then you would receive $5'000.
The other kind of stock is known as preferred stock and the way this works is that your investment will accrue a set percentage each year and you will know this beforehand. Being a preferred stock holder has more advantages as you will be able to receive a percentage of the net profit during the year and when a dividend is announced you will be in the forefront to receive it before the common stock holders.
Basically when you put your money into a business you will be investing into it, and your profits will rise and fall accordingly, if you wish you are able to sell on these stocks so that you can make further profit, and many people do so successfully, but to know when is the best time to buy and sell you will need to keep your eye on the stock market. - 23196
The way stocks work is that if there is a business that is in need of money but does not have the finances, rather than sell the business they sell shares, which when in bulk are called stocks. If the business picks up then you are able to profit and earn a lot more than what you put in, or if the money was sitting in a bank.
You can gain from the profits you put in but there is also a possibility you may not, especially if the business goes bust which is why you will want to invest in something worthwhile.
There are different kinds of stock that you are able to buy and these kinds can be split into two categories, the first being common stock the second preferred stock. Both kinds are subject to a dividend, which is basically an announced payout of a percentage of profits or surplus profits.
Common stock is when you invest a certain amount of money into a business that you feel is likely to profit. The management will decide what percentage of the money you will be able to receive and this can change each time the dividend is announced, this will mean that you can sometimes get more than others.
I can only explain to you the way it is divided by giving you an example. If a dividend is announced and the company has $100'000 in profits then the management decided to give stock holders 10% of this, the 10% would then be divided among all the stock holders, so if you had 50% of the stock then you would receive $5'000.
The other kind of stock is known as preferred stock and the way this works is that your investment will accrue a set percentage each year and you will know this beforehand. Being a preferred stock holder has more advantages as you will be able to receive a percentage of the net profit during the year and when a dividend is announced you will be in the forefront to receive it before the common stock holders.
Basically when you put your money into a business you will be investing into it, and your profits will rise and fall accordingly, if you wish you are able to sell on these stocks so that you can make further profit, and many people do so successfully, but to know when is the best time to buy and sell you will need to keep your eye on the stock market. - 23196
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Are you confused about how to invest? Do not worry, you aren?t alone! BeforeYouInvest.com is a great resource for you to learn about a variety of investment topics from how much the average retirement savings should be to low minimum investment mutual funds for beginner investors.
posted by X - Men @ 2:59 AM
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