Whoever owns the shares of stock are the owners of the public company, no one else. When you buy a share of stock, you are then one of the owners of that company. It could be any of over 13,000 companies that are traded with stock on the open market such as McDonald’s, Coca-Cola, Amazon.com, Ford, Krogers, your local bakery or electric company.
As a company earns money, it becomes more valuable and this value is reflected in the price of its shares on the open market. You can collect this increase in value when you sell your shares for more than you paid for them.
The company’s board of directors makes the major company decisions and decides what to do with its net earnings.
?Some or all of the earnings may be re-invested in the company so it can grow, open new stores or make repairs. When this is done, the earnings money is used up but the company is more valuable by that same amount.
The per share price, having increased because of the earnings, retain that increase when the earnings are re-invested in the company.
?Some or all of the earnings may be given directly to the shareholders and this is called a dividend. They just mail you a check or send the money to your brokerage account. This makes the price of the stock decrease by the same amount as the dividend, so you have the same value in the total of stock and dividends.
Since you are an owner of the company, the members of the board of directors work for you. You can inform the board of your ideas, concerns or recommendations and these carry the weight of your shares.
Each year there is an election and you can vote for the board positions and some special rulings, one vote for each share that you own. If you own at least 51% of the shares then your vote always wins in the election.
You are also protected when you own stock. For instance, if your company gets sued and loses more than it can pay, the law cannot come to you, one of the owners, and confiscate your house or other property. The shares may become worthless, but that is all you can lose.
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If you buy stock hoping that you can sell it for a quick profit because of the daily or monthly swings in price, then you are gambling rather than investing. You are trying to guess better than the public, including professionals, how the price will change.
To truly invest, choose a company that has steady earnings each year instead of losses. If your company has very little long term debt, it will likely not get into financial trouble.
Buy quality stocks and hold on to them. When you hold these over a period of time, the share prices will go up for a real reason - the companies are earning money every year and becoming more valuable. This is not gambling; you are owner of a money making business.
If you save a portion of your income each payday and as it accumulates invest in stocks, over the course of several years you can grow very wealthy indeed. It is like hiring someone to get a job and earn money for you, and then using that money to hire more workers. Your money grows exponentially.
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To begin trading, you need to go to a brokerage house, such as Scottrade or TD Ameritrade. They will have you fill out some papers and then you deposit money into your new account.
When you are ready to buy, you can phone the broker or, most commonly, buy or sell shares directly on their web site.
The shares that you buy are kept on file at the brokerage. Many companies no longer issue certificates for shares but keep track electronically.
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A stock market or equity market is the aggregation of buyers and sellers; these are securities listed on a stock exchange as well as those only traded privately. If you are a beginner go to arihantcapital.com , I had also taken services from them & was really satisfied. Good Luck!
Stock TRADING is a mistake, especially for a beginner.
INVESTING in stocks is a great idea if you want to increase your net worth and have more money when you retire many years from now.
Invest in the high quality blue chip stocks, be patient, be disciplined, have some realistic goals in mind, Invest whatever you can afford each month.
In most cases it is a zero sum game where people try to out-fox each other in selecting stocks that seem like they are likely to increase in value, which allows the stock(s) to be resold for more than they were purchased for. Most of a stock's value is influenced by the profitability of the company.
You either buy cheap stocks and sell them for more or the other way for instance stockpair.net you invest and determine whether the stock is going to go up or down and if you get it right you get back almost double
What is stock trading, how do you trade stocks, and what is the goal? Just beginning to learn about stocks. Thank you
