The Basics of Stock Investing – Part 5

Note from Marj: This fantastic series of posts is contributed by The Investment Club Network (TICN). TICN GB Ltd kindly agreed to help us with our financial education so TICN will be running a mini-course about investing here in easisell.com/blog! We’ll publish one article every 4 days so you can learn in bite-size chunks.

I can personally vouch for the quality of support and education TICN offers – it’s world class and they are really serious about working with you towards your financial freedom. If you really want to be financially free but never took the time to learn how to invest, now is the time. I strongly urge you to commit to this mini-course and start investing in yourself and in your financial education now!

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Course Contents

• The Basics of Stock Investing – Part 1
• The Basics of Stock Investing – Part 2
• The Basics of Stock Investing – Part 3
• The Basics of Stock Investing – Part 4
• The Basics of Stock Investing – Part 5
• The Basics of Stock Investing – Part 6

Stock Table

Columns 1 & 2:

52-Week Hi and Low. These are the highest and lowest prices that a stock has traded at over the previous 52-weeks (1 year). This typically does not include the previous day’s trading.

Column 3:

Company Name & Type of Stock. This column lists the name of the company. If there are no special symbols or letters following the name, it is common stock. Different symbols imply different classes of shares. For example, “pf” means the shares are preferred stock.

Column 4:

Ticker Symbol. This is the unique alphabetic name which identifies the stock on the exchange’s ticker. The ticker tape will quote the latest prices alongside this symbol. If you are looking for stock quotes online, you always search for a company by the ticker symbol.

Column 5:

Dividend Per Share. This indicates the annual dividend payment per share. If this space is blank, the company does not currently pay out dividends.

Column 6:

Dividend Yield. The percentage return for the dividend. Calculated as annual dividends per share divided by price per share.

Column 7:

Price/Earnings Ratio. This is calculated by dividing the current stock price by earnings per share from the last four quarters. For more detail on how to interpret this, see our P/E Ratio tutorial.

Column 8:

Trading Volume. This figure shows the total number of shares traded for the day, listed in hundreds. To get the actual number traded, add “00″ to the end of the number listed.

Column 9 & 10:

Day High & Low. This indicates the price range the stock has traded at throughout the day’s trading. In other words, these are the maximum and the minimum people have paid for the stock.

Column 11:

Close. The close is the last trading price recorded when the market closed on the day. If the closing price is up or down more than 5% than the previous day’s close, the entire listing for that stock is bold-faced. Keep in mind you are not guaranteed to get this price if you buy the stock the next day. Because a stock’s price is constantly changing (even after an exchange is closed for the day) the close merely serves as an indicator of past performance.

Column 12:

Net Change. This is the dollar value change in the stock price from the previous day’s closing price. When you hear about a stock being: “up for the day” it means the net change was positive.

You can Make Money Whether Stocks Rise or Fall

“Bulls and Bears”, what’s that all about?

As you invest more and more you will hear about the bulls and bears. No, these names do not refer to farm animals, they are terms that describe the performance of the stock market.

A bull market is when stocks are rising, people are finding jobs, GDP is growing, everything looks just plain rosy. Picking stocks during a bull market is sometimes easier because everything is going up. Bull markets cannot last forever though, and sometimes lead to a dangerous situations if stocks become overvalued. If a person is an optimist, believing that stocks will go up, they are called a “bull”.

The opposite, a bear market, is when there are falling stock prices, recession, high unemployment, and relatively high inflation. Bear markets make it tough for investors to pick profitable stocks, one solution to this is to make money when stocks are falling using a technique called short selling (discussed in our short selling tutorial). Another strategy is to wait on the sidelines until you feel that the bear market is nearing its end and start buying in anticipation of a bull market. If a person is a pessimist, believing that stocks are going to drop, they are called a “bear”.

That’s it for Part 5! On Part 6, we will discuss the types of accounts and orders and conclude this mini-course.

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The Investment Club Network provides financial education, coaching and support. We organise educational seminars to help you understand the world of investment – and show you how to invest wisely and profitably. We help you understand how prices move, what factors affect them and by what mechanisms the markets reflect these changes.
Our aim is to outperform the stockmarket month on month thereby giving members real increases in asset values. So whether you wish to learn how the stock market operates, trade online yourself, become an accomplished ‘Self Investor’ or become a member of one of our ever expanding number of clubs, TICN can deliver this to you.

Related posts:

1. The Basics of Stock Investing – Part 2
2. The Basics of Stock Investing – Part 3
3. The Basics of Stock Investing – Part 4
4. The Basics of Stock Investing – Part 6
5. The Basics of Stocks Investing – Part 1