How do Stock Prices Change?
When you buy stocks, you have two ways to make money. You can make money through dividends that the company pays for each share you own. For example, they might pay 25 cents per share each quarter. Dividends are not guaranteed, though.
You can also earn a profit through capital gain. When you buy stock, you will pay a certain price. If in the future the price goes up, and this is what you want it to do, you can sell it and make a profit. Subtract what you paid for what you sold it for and this is your capital gain.
When someone buys shares of stock, they do so in hopes of profiting through capital gains. High dividend paying stocks are often sought after by retirees who are looking for a stable source of income.
You can't make capital gains unless the price goes up. (unless your selling short, but that's an entirely different idea) Stock prices are always changing and can go up or down. What makes them change?
The price of stocks goes up and down the same way that the price of anything else goes up and down. It is an economic principle of supply and demand. Maybe you remember that from your economic class.
When the supply increases and the demand stays the same, the price will decrease. When the demand increases and the supply stays the same, the price increases. They vary inversely and the price adjusts along with them.
Stock prices change depending on who is willing to buy and sell. If more people want to buy a particular stock than there are enough people to sell it to them, they have to increase the price. If more people want to sell a particular stock than there are enough people to buy from them, they have to drop the price.
If you understand how this works, you can better understand how to make money with stocks. You want to buy stocks that you think a lot of people will be buying in the future so that the price goes up. - 23223
You can also earn a profit through capital gain. When you buy stock, you will pay a certain price. If in the future the price goes up, and this is what you want it to do, you can sell it and make a profit. Subtract what you paid for what you sold it for and this is your capital gain.
When someone buys shares of stock, they do so in hopes of profiting through capital gains. High dividend paying stocks are often sought after by retirees who are looking for a stable source of income.
You can't make capital gains unless the price goes up. (unless your selling short, but that's an entirely different idea) Stock prices are always changing and can go up or down. What makes them change?
The price of stocks goes up and down the same way that the price of anything else goes up and down. It is an economic principle of supply and demand. Maybe you remember that from your economic class.
When the supply increases and the demand stays the same, the price will decrease. When the demand increases and the supply stays the same, the price increases. They vary inversely and the price adjusts along with them.
Stock prices change depending on who is willing to buy and sell. If more people want to buy a particular stock than there are enough people to sell it to them, they have to increase the price. If more people want to sell a particular stock than there are enough people to buy from them, they have to drop the price.
If you understand how this works, you can better understand how to make money with stocks. You want to buy stocks that you think a lot of people will be buying in the future so that the price goes up. - 23223
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How do stock prices work? Learn this and how to buy stocks so you can start investing today!
posted by X - Men @ 9:20 AM
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