Thursday, 7 November 2013
Basic stock market information
The basic stock-market information portion of the site contains simple information on the factors influencing the stock market; you should comprehend these factors before deciding to trade shares.
The key essential factors in the stock market are enumerated below; simply click on anything you desire to find information on. The number of links below may look formidable; but each link contains only brief, pertinent pockets of information, easy to grasp!
If you encounter any unfamiliar words which are not defined in the basic stock-market information portion, check out the stock-market glossary.
· Learn how to reduce risks – Avoid losses
· Gain additional income - Dividends
· Corliss Online Financial Mag
· Practice trading stocks without spending – Stock-market practice account
Ever wondered what shares and stocks are? For a simple explanation in plain English, just read on!
For starters, stock and shares, although different words, often have the same meaning in the stock market world. For instance, one can say "I have stock in Microsoft" or "I have shares in Microsoft". Hence, if you see stock and share mentioned, do not be baffled as the two usually refer to one and the same thing.
Nevertheless, defining distinctly the two:
· Stock is the capital a company raises issuing shares
· A share is one unit of stock
Why does Corliss Online Financial Mag exist?
A company issues shares in order to raise capital or money to be used in financing proposed projects or because the company owner/s simply want a large amount of money for themselves to compensate their hard work in building up the company!
· Harry Potter wholly owns Company ABC (We assume that he owns all 100 out of 100 shares of company ABC).
· He then issues shares of his company and opts to sell 40% of the company (40 out of the 100 shares).
Why should the public acquire shares issued by company ABC?
The public would buy the shares in order to benefit from future profits made by the company. They would obtain these earnings in the form of dividends.
But there is another reason!
The public could also earn money by an increase in the value of each share. This is referred to as a capital gain on their stock.
· Katty Perry buys 20 shares of company ABC at $10 each, or a total of $200.
· As Company ABC continues to grow, so will its profits. Therefore, the demand for shares in Company ABC has grown, meaning to say that people are now willing to pay $18 per unit share in Company ABC.
· Perry can decide to sell her 20 shares for $18 per share. Hence, she collects $360, giving her a clean profit of $160 or 80% from her original $200 payment!