subject: The Basics Of Stock Investing [print this page] 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.
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.
The more you invest the more you are likely to gain or possibly lose so you will need to be confident that you are investing in a worthwhile business or research cause.
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 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.
For example if it is decided that 10% of the companies profits will go to the stockholders, and the profit is $100'000 then $10'000 will be split amongst the stock holders, if you have 50% of the stock then you will get $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.
by: Wayne Sather
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