The Basics Of Stock Investing Explained In A Term You Can Understand.
In the present economic crisis everyone is looking for ways in which they can make money, and before that to successfully have enough money to be able to retire with or enjoy the finer things in life. Stock investment is a way that people are able to do just that, but I would like to today explain to you the basics of stock investing.
Stocks are basically a group of shares within a business or company; this will mean that you are able to benefit from profits made. You do not have to take any part in the day to day running of the business, you just invest to enable the company to grow and because you have done so you will be able to earn more than you would by putting the money in the bank and get a percentage of the company's profits.
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.
The different kinds of stocks that are available are commonly split into two different categories. The first kind is called a common stock and the other is a preferred stock. With both of them the money you can get is called a dividend. This is the amount that is decided to be split among the people who have investments in the company, you can also benefit from surplus profit.
Common stock is when your investment is put into the business of choice and then you will receive a percentage of profit, as decided beforehand by the management each year. The percentage of your cut will depend on the amount other investors have put into the business.
The best way I can explain how the profits are split is by giving you an example. Imagine the company profits are $100'000 and then it is decided by management that the stock holders are to get $10'000. If you own 50% of the stock you would make $5'000.
You can choose the other form of stock investing which also has its benefits, and this is known as preferred stock. The way this differs from common stock is that the percentage you receive on dividend announcement is a set percentage, and you will be priority to receive the payments over those who have invested in common stock.
What you are doing when you buy stocks is investing in a company, and being paid for doing so depending on the company's earnings. You have the option to sell on these stocks when you wish, and you when business is good you will be able to get a lot more than you originally paid for them. In order to get the best profits when you buy or sell stocks you must watch the stock market. - 23223
Stocks are basically a group of shares within a business or company; this will mean that you are able to benefit from profits made. You do not have to take any part in the day to day running of the business, you just invest to enable the company to grow and because you have done so you will be able to earn more than you would by putting the money in the bank and get a percentage of the company's profits.
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.
The different kinds of stocks that are available are commonly split into two different categories. The first kind is called a common stock and the other is a preferred stock. With both of them the money you can get is called a dividend. This is the amount that is decided to be split among the people who have investments in the company, you can also benefit from surplus profit.
Common stock is when your investment is put into the business of choice and then you will receive a percentage of profit, as decided beforehand by the management each year. The percentage of your cut will depend on the amount other investors have put into the business.
The best way I can explain how the profits are split is by giving you an example. Imagine the company profits are $100'000 and then it is decided by management that the stock holders are to get $10'000. If you own 50% of the stock you would make $5'000.
You can choose the other form of stock investing which also has its benefits, and this is known as preferred stock. The way this differs from common stock is that the percentage you receive on dividend announcement is a set percentage, and you will be priority to receive the payments over those who have invested in common stock.
What you are doing when you buy stocks is investing in a company, and being paid for doing so depending on the company's earnings. You have the option to sell on these stocks when you wish, and you when business is good you will be able to get a lot more than you originally paid for them. In order to get the best profits when you buy or sell stocks you must watch the stock market. - 23223
About the Author:
Are you mixed up about how to invest? Don't be concerned, you aren?t alone! BeforeYouInvest.com is a great resource for you to learn about a variety of investing topics from how much the average retirement savings should be to low minimum investment mutual funds for beginner investors.
posted by X - Men @ 4:13 AM
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