Open your newspaper to the stock market page on any given day, and you'll find almost more information than you need to know before buying stocks. Besides telling you yesterday's closing price of most listed stocks, it will also show you the year-to-date changes, as well as other data that will help you decide on your next investment. What follows is basic information you'll need as you plan your investment portfolio.
Instructions
1. Start your investment search by finding out a stock's trading range over the past year. By seeing a stock's low and high prices, you will begin to understand how volatile the stock is, and if it is trending up or down. Look to the right of the listing to see its trading range the day before as well as a comparison of its close yesterday and the day before.
2. Go to the middle of the listing and look for the heading "sales." That figure will tell you how many shares of the stock traded the day before. That will tell you something about the popularity of the stock with investors. If the stock has few trades, most likely it will fluctuate more than if it was actively traded.
3. Look for the heading that will tell you how much the company has paid in dividends on its stock. That's particularly important because it will tell you how much money you can expect to receive on your holdings. Look at the information marked P/E, the price/earnings ratio. This figure represents the relationship between the price of the stock at yesterday's close and the dividend. If the stock has a low P/E, it might mean that the company has not hit the radar screen of many investors, or that it is in the midst of a corporate downturn. On the other hand, if it has a high P/E, it might mean that it has a rosy future and that investors are betting on it.
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