If you buy shares of Wal-Mart, you actually own part of Wal-Mart. Companies invite their investors once in a while to a meeting where they sit around and talk. The investors get to share their opinion about the company and they also get a say in what the company is planning to do. Investors can help decide if the company merges.
If you decided to buy shares of Wal-Mart, you would need to pay money for each share you decide to buy and a broker's fee. The broker is the person who will place the order for you. You cannot buy shares by yourself. If you were to trade over the Internet, the broker would be the company you are trading with.
Reading the Stock Tables
To find information on a stock you can read the newspaper. The stock tables are located in the business section of the paper. You can also get information over the Internet.
52-week high- This is the highest the stock has been in 52 weeks.
52-week low- This is the lowest the stock has been in 52 weeks.
Dividend- The dividend is the annual payment for each share that you own of your stock. If Wal-Mart has a dividend of $1.00 you will get paid $1.00 for each share you own. Dividends are paid once a year.
Yield- The yield is a prediction of how much money you will earn with this stock. If Wal-Mart has a yield of 3.8 % you will earn back 3.8 % of the total amount of money you invested.
P/E Ratio- This is the price of a share divided by its earnings per share. The higher this is the better.
High- The high is the highest price of the stock during that day. Exchanges are opened from 9'o'clock to 3'o'clock and during that time the prices will change constantly.
Low- You better know what this is.
Sales 100s- This is the # of round lots that were sold and bought during that whole day. A round lot is a group of 100 shares. Any odd lots are not considered. Odd lots are less than 100 shares. Volume and this are basically the same.
Last- This is the price of the stock when it the exchange closed.
Change- This is the difference between the previous days close and todays. If Wal-Mart is + 1/2 that means the price has gone up half of a dollar. If it is - 1/2 that means it went down half a dollar. When the price goes up of a stock that you own you make money. You make money for each share that you own. If it is up 1/2 you make 1/2 for each share that you own. This is the same when it goes down.
Beta- This describes how quickly the price of a stock changes. If the beta is over 1 then it is more volatile than the DJIA. If it is less than 1 then it is less volatile than the DJIA.
If the DJIA is up 10 % and the beta of the stock is over 1 the stock price is most likely to be up over 10 % and this is the same if is down.continue
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