 |
| - |
| How
do I pick the right stock to invest in? |
The key to
finding the right stock to invest in is no
secret. It. s research! If you want to
make money by investing in the stock market
you have to do research and have reason
to believe that the stock will go up in
price. In today. s world a major way to
research a company is to get a chart on them
online. Here is the basic makeup of the
chart: |
| - |
| Common
Stock Table |
| Tuesday
August 8, 2000 |
ZXX
Corporation (ZX) |
|
| Net
Chg |
+1
1/8 |
| 52
Week: Hi-Lo |
58-43 |
| SYMBOL |
ZX |
| DIV |
2.30 |
| VOL |
32.5 |
| YLD |
5 |
| PE |
10 |
| Hi-Lo
Previous |
47-45 |
| Close |
46
3/4 |
|
|
| - |
| I
know your probably saying, "So what? Is
that supposed to mean something to me?"
Well it is telling you a lot more than what
it looks like. Here is what it is saying& |
| - |
Net
Change(Net Chg) |
| The
first row is showing you how much the stock
price changes between the closing price for
the previous day and the current day. |
| - |
| 52
Week: High - Low |
| This
second row is telling you the highest and
lowest prices at which the stock has been
sold at during the past year(52 weeks). In
this example the high would be 58 and the
low would be 43. |
| - |
(Company)Symbol |
| The
third row is the abbreviated name of the
company that issued the stock. This is also
referred to as a ticker symbol. |
| - |
Dividends |
| The
fourth column is the annual dividends paid
per share. If you forgot what dividends are
they are the amount paid to stockholders by
the company. |
| - |
Volume |
| The
fifth row is implying the volume of
shares(in 100s) that were traded throughout
the course of the day. In our example we
show that on August 8, 2000, 32,500 shares
were traded by ZXX Corp.. |
| - |
Yield(YLD) |
| This
shows an approximation of the dividend
yield. The dividend yield is the current
return on what you invested. It is
determined by dividing the dividend by the
current price. |
| - |
Price
to Earnings Ratio(PE) |
| This
compares the price per share to the earnings
per share. It shows how much an investor is
willing to pay for $1 of current earnings
per share. |
| - |
High
- Low Previous |
| This
shows the highest and lowest prices at which
the stock traded during the last trading
day. |
| - |
Close |
| That
is the last price at which a trade was made
during the trading day. |
| - |
| Note:
Many newspapers and magazines provide the
same information but in a different order,
however other may just provide some
information (e.g. previous close and volume) |
| - |
| OK,
now that you have some basics down lets talk
about where you can find some information on
stocks that might interest you. |
| - |
Analyst
Reports |
| Analysts are
the people that keep an intent eye on the
market at all time and may notice trends or
when a stock might grow. These reports may
be available through brokerages and on TV(Nightly
Business Report, Wall Street Week In
Review, Market Watch, Money Machine, & ) |
| - |
The
Internet |
| Today
you can find just about anything on the
Internet, including information about
different companies. It can be a very
resourceful place however you have to watch
who the source is. |
| - |
Newspapers/Periodicals |
| Many newspapers
and periodicals such as the Wall Street
Journal, Barron. s, Business Week,
and Better Investing may provide you with
information about stocks and different
markets. |
| - |
Annual
Reports |
| These provide
information about a companies finances.
You can obtain these reports from a
broker, the company, or from the company. s
website.
Now that you have the information what do
you do with it? Well that is relatively easy
answer, you have to analyze it. However, the
process of analysis is not so easy. When
analyzing information investors usually fall
into two categories, technicians and
fundamentalists. |
| - |
Technicians |
| These
are investors who invest in the market by
using past trends in the market. They tend
to be day traders, which means that they buy
and sell stocks in a short amount of time.
They do not pay any attention to fundamental
issues. They buy and sell stocks in
accordance to the movement of prices. One
popular tool that they use is called 200-day
moving average. This is an average of the
past 200 days of stock closing prices. The
way that the investors use this is that when
the price is above the average listed in the
200 days they buy the stock and when it dips
below they sell the stock. Though this may
seem like a great choice you must be aware
of the high prices of transactions and the
taxes that you will run into. This style of
investing is mostly for those who can see
their money go on a roller coaster ride. |
| - |
Fundamentalists |
| Fundamentalist are investors
who take into account all of the different
variables that can effect a stock. s
growth over a long period of time. Some
factors that are taken into consideration
are earnings, dividends, and the
companies book values. They tend to buy a
stock and hold it as a long term investment.
Their research is more in-depth than
technicians. . They do not worry about
the daily ups and downs of their stock
prices however they see it as a chance to
increase the amount of shares that they
posses. They believe that if they invest in
a stock in a growing, strong company that
eventually their stock price will reflect
the actions and performance of the company. |
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