What You Need To Know In Buying Stocks
For the sake of obtaining a common understanding of what a stock is, let's define it in plain and simple terms.
A share in the ownership of a company-this is what a stock basically means.
Stock basically represents a claim on the company's assets and earnings.
This means that as you acquire more stock, your ownership stake in the company becomes greater.
The terms equity, shares, and stock all mean the same thing.
Now, being a company stock owner means that you are one of the many owners or shareholders of a company, which entitles you to have a claim to everything the company owns.
Technically, this means that you own a tiny silver of every piece of furniture, every trademark, and every contract of the company.
Additionally, you are entitled to your share of the company's earnings as well as any voting rights attached to the stock-all of these are under your privileges and rights as an owner.
Having these definitions in mind, finally how do we go about buying stocks? In this generation of modern age, we do not go into the trading pit yelling and screaming your orders.
We have two main ways to purchase a stock: (1) Using a Brokerage and (2) DRIPs & DIPs.
First is using a brokerage, the most common method.
Brokerages come in two different types: full-service brokerages and discount brokerages.
The former should supposedly offer you an expert advice and can manage your account though they also charge a lot.
On the other hand, discount brokerages offer a little in the way of personal attention but are much cheaper compared to full-service brokerages.
The second one is through Dividend Investment plans (DRIPs) and Direct investment plans (DIPs).
These are the plans by which individual companies allow shareholders to purchase stock directly from the company for a minimal cost.
DRIPs are said to be a great way to invest a small amounts of money at regular intervals.
You might wonder how much does it cost to buy stocks.
Well, this question is actually very vague since it is influenced by the variables that surround it.
Certain external and internal factors could influence the price per share of a common stock-the closing price of a stock may be higher or lower in the next opening price the following day.
Normally, the price will open quite close to the closing price the previous day.
The closing price of a stock can also have an effect on the next day's price since there tends to be a carry-over effect from close to open that reduces stock volatility.
Stock price breakouts occur when those that are buying stock sense an event that could radically change the value of a company and its stock value.
The factors that motivate those buying stocks include things that impact production, public perception and overall profitability.
This will result to an up and down movement in a company's stock price.
Nevertheless, it is always a new day when the stock market opens and those buying stocks will help to establish stock prices.
A share in the ownership of a company-this is what a stock basically means.
Stock basically represents a claim on the company's assets and earnings.
This means that as you acquire more stock, your ownership stake in the company becomes greater.
The terms equity, shares, and stock all mean the same thing.
Now, being a company stock owner means that you are one of the many owners or shareholders of a company, which entitles you to have a claim to everything the company owns.
Technically, this means that you own a tiny silver of every piece of furniture, every trademark, and every contract of the company.
Additionally, you are entitled to your share of the company's earnings as well as any voting rights attached to the stock-all of these are under your privileges and rights as an owner.
Having these definitions in mind, finally how do we go about buying stocks? In this generation of modern age, we do not go into the trading pit yelling and screaming your orders.
We have two main ways to purchase a stock: (1) Using a Brokerage and (2) DRIPs & DIPs.
First is using a brokerage, the most common method.
Brokerages come in two different types: full-service brokerages and discount brokerages.
The former should supposedly offer you an expert advice and can manage your account though they also charge a lot.
On the other hand, discount brokerages offer a little in the way of personal attention but are much cheaper compared to full-service brokerages.
The second one is through Dividend Investment plans (DRIPs) and Direct investment plans (DIPs).
These are the plans by which individual companies allow shareholders to purchase stock directly from the company for a minimal cost.
DRIPs are said to be a great way to invest a small amounts of money at regular intervals.
You might wonder how much does it cost to buy stocks.
Well, this question is actually very vague since it is influenced by the variables that surround it.
Certain external and internal factors could influence the price per share of a common stock-the closing price of a stock may be higher or lower in the next opening price the following day.
Normally, the price will open quite close to the closing price the previous day.
The closing price of a stock can also have an effect on the next day's price since there tends to be a carry-over effect from close to open that reduces stock volatility.
Stock price breakouts occur when those that are buying stock sense an event that could radically change the value of a company and its stock value.
The factors that motivate those buying stocks include things that impact production, public perception and overall profitability.
This will result to an up and down movement in a company's stock price.
Nevertheless, it is always a new day when the stock market opens and those buying stocks will help to establish stock prices.
