Stocks Basics: Conclusion
Let's recap what we've learned in this tutorial:
- Stock means ownership. As an owner, you have a claim on the assets and earnings of a company as well as voting rights with your shares.
- Stock is equity, bonds are debt. Bondholders are guaranteed a return on their investment and have a higher claim than shareholders. This is generally why stocks are considered riskier investments and require a higher rate of return.
- You can lose all of your investment with stocks. The flip-side of this is you can make a lot of money if you invest in the right company.
- The two main types of stock are common and preferred. It is also possible for a company to create different classes of stock.
- Stock markets are places where buyers and sellers of stock meet to trade. The NYSE and the Nasdaq are the most important exchanges in the United States.
- Stock prices change according to supply and demand. There are many factors influencing prices, the most important of which is earnings.
- There is no consensus as to why stock prices move the way they do.
- To buy stocks you can either use a brokerage or a dividend reinvestment plan (DRIP).
- Stock tables/quotes actually aren't that hard to read once you know what everything stands for!
- Bulls make money, bears make money, but pigs get slaughtered!
The difference between the highest current bid price among dealers ...
A catalyst in equity markets is a revelation or event that propels ...
The act of committing money or capital to an endeavor with the ...
An auction market in which participants buy and sell commodity/future ...
Capital markets are markets for buying and selling equity and ...
The market in which shares are issued and traded, either through ...
The first American stock markets were established in Philadelphia in 1790 and New York in 1792. Trading was largely dominated ... Read Full Answer >>
Market maker Nathan Rothschild learned much of his financial savvy from his father, who dealt in coins and paper money. He ... Read Full Answer >>
"Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
The 'Rule of 72' is a simplified way to determine how long an investment will take to double, given a fixed annual rate of ... Read Full Answer >>
All publicly-traded companies have a set number of shares that are outstanding on the stock market. A stock split is a decision ... Read Full Answer >>
A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
You May Also Like