Read the stock market overview
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| Many people are familiar with the stock market. However, most individuals are still unfamiliar with terms like "stocks |
Many people are familiar with the stock market. However, most individuals are still unfamiliar with terms like "stocks", "buying and selling stocks", "stock market charts" and "bulls and bears".
Even the term "stock market" remains a confusing point for those without financial experience. There are times when they scratch their heads puzzled whenever they hear their neighbors complain of falling stock prices in the market or if a colleague suddenly gets huge profits from his investments in the stock market. What most people realize is that trading in the stock market can lead to corporate prosperity or bankruptcy if these companies play the "stock market game" correctly. Simply put, shares are representations of a company's assets and profits. If the company makes a profit from the shares, this value is divided annually among the shareholders in the form of dividends. For example, if a company makes a profit of $ 100,000 this year and has 20 shareholders who hold one share, the shareholders will receive a profit of $ 5,000.
Definition of the stock market
The stock market - also known as the "stock exchange" - is a financial institution where licensed brokers trade shares of companies and other securities - including private sector securities - that are approved for trading by the exchange. Exchanges can occur physically or practically. Brokers buy and sell stocks based on the needs and requirements of the people and / or companies they represent.
There are two types of stock markets ...
• Primary stock market = for IPO trading and other new releases by sellers and buyers
• Secondary stock market = trading of shares in the market by buyers and sellers
Common stock market conditions
The "market language" of the stock market is not something that can be confused with the feeling of dread. In order to understand the trends in the stock market, you need to know some commonly used terms and the ability to evaluate stock market charts. By taking the initiative to learn the fundamentals of the stock market, you will be transformed into a knowledgeable investor and be able to make good stock decisions.
Let's take a look at some of the terms you'll likely encounter in the stock market ...
Share price = This is the price of buying and selling stocks. The factors that directly affect stock prices are the position and performance of the company issuing the shares. Another term related to the share price is the market capitalization - or simply the market cap - which is the share price times the number of shares. Other factors that affect stock prices include current performance, expansion, and future growth. Let's put it in simpler terms. If the company performs poorly in the stock market, then its share prices decrease in value. On the other hand, if these companies perform well, you will see the stock price rise.
Reading stock market charts = These charts and quotations provide the current state of stock performance. These stock changes can be reflected as "day to day" or "intraday" depending on trading on that specific day.
52-week high and low = This consists of 52-week inventory data. On the reporting date, you will be able to see stocks with lower and higher prices during this 52-week period.
Stock type = Preferred shares will have specific symbols written after the company name. If no such symbols are indicated, then the stock is a common stock.
Index symbol = Specific abbreviations or letters are assigned to each company trading in the stock market. Cursor symbols are used so that all companies can be included in the tape. All major exchanges in the United States - such as the New York Stock Exchange, NASDAQ, Dow Jones, and the American Stock Exchange - index symbols are restricted from 1 to 4 characters only (similar to the symbols displayed on the British stock exchanges). Any new company must register its own codes, which should be different from the codes that other companies are already using. Some examples of Apple Computer Inc. AAPL indicator icons include And INTC for Intel. You will probably notice that some symbols will have a period followed by one or two additional letters. One good example is BRK.B. This means that shares are offered by Berkshire Hathway, which is a "B" low price stock.
Dividend Per Share and Dividend Yield = In the stock market chart, it is said that the company issues earnings if both columns are filled with these addresses. You can calculate the dividend yield by dividing the annual earnings per share by the share price. This dividend yield means that the shareholder has a dividend on his profits.
Price / Earnings Ratio or P / E Ratio = This value is calculated by dividing the most recent share price by the average earnings per share for the last four quarters.
Trading volume = the total number of buying and selling transactions made during the day.
Closing = The last stock price listed on the day the stock market closed
Net change = difference in stock prices since the last change that took place. Net Change enables you to see the direction where the stock price is heading - with a plus symbol for a positive trend while a minus symbol for a negative trend.
Bulls and bears = the term "bulls" and "bears" are economic indicators of the stock market. You have an emerging market when stock values rise. This is an indication of good health in the economy. In the emerging market, investors can spot large profits from stock sales. On the other hand, the bear market indicates an economic downtrend so that investors need to sell their shares before prices drop much lower. During the bear market, many investors and companies tend to lose dramatically if they do not rush to buy good stocks and sell those shares before they drop quickly. The general rule to follow in the stock market is to buy when prices are low and sell when prices are high (before prices drop).
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