Omar asked in Business & FinanceInvesting · 6 years ago

Can someone explain stocks to me? (Simply)?

6 Answers

  • 6 years ago
    Favorite Answer

    You purchase shares of a company (example GE General Electric) at the current price. Some companies pay a dividend quarterly at a specified % rate. If the stock increases, and you sell, you will have made a profit. Should the price go down, and you sell, you will have lost some of your investment. The stock market is a risky investment. Watch one of the financial cable channels to gain some knowledge. Establish an imaginary group (portfolio) of investments and follow their activity for some months to see how you would have made out IF you had invested. Pick companies you may be aware of - Apple AAPL - Microsoft MSFT - Mcdonalds MCD - Dunkin donuts DD - AT&T T - Verizon VZ - Toyota TM. Good luck.

  • 6 years ago

    They are shares in a company. You want to buy stocks that have a history of paying a dividend. That is, you get a share of the company's profits called a dividend. You want a stock that pays a dividend of at least 3% of the share price per annum.

    If you need to ever sell the stock you home to be able to sell it for more than you paid for it. But the price you get for selling a stock is a crap shoot and you may get less.

  • 6 years ago

    Stocks represent ownership in a company. If a company goes public, it is offering shares of its ownership to the public. This is a common way for a small company to raise money in order to expand. People who own shares of stock have the right to vote in proxy elections to elect officers to run the company, and if the company decides to use profits to pay its owners instead of using then for expansion, than each share owner will receive an amount proportionate to the amount of shares they own. This amount is known as a 'dividend.'

  • Anonymous
    6 years ago

    stocks are pretty musch tiny parts of a company. for example, i could go buy some nike stocks for maybe $19 a stock. so say i buy 10 stocks for $19... i would then wait to see if the price would go up. lets say the price for each stock goes up to $25. therefore i can then sell my nike stocks and earn $6 more for each stock. its a long term thing...

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  • RAY
    Lv 5
    6 years ago

    A company is divided financially into parts in order that several shareholders (owners) can have a part. These parts, or shares may be traded between different people ina stockmarket.

  • 6 years ago

    In simple terms and explanation:

    Let’s say with $1000 you open a store and the store is doing well, you are happy but you want to open up another store, now you need an additional $1000.

    You don’t have it so you seek a partner, however your friend doesn’t have $1000 to be a partner.

    Your next choice is to get more people involved so each one can put a lower amount in it

    You put your store on the stock market and decide to sell 100 (outstanding shares) portions of your store each worth 10 dollars (The Stock)

    Investors read about your goal and if they like it they may buy some, so you have 1 person buying 1 share at 10, the 2nd buys 5 shares at 10; the 3rd buys 40 shares at 10, and so on and so on…

    The more people buy your shares the more money you get and you are now able to open up your second store.

    If your store makes money, then you divide the profit between all the people who purchased your stocks, making their stock value go up, if you lost money, again you divide the loss and make their stock go down.

    If your store bankrupts then all those who own stocks in your store lost everything.

    Meanwhile, some people who may have purchased your stocks, change their mind and sell their portion of stocks back, it could be higher or lower than the original 10 dollars investment, this causes other people to wonder why that person sold and may even sell their stocks, or perhaps other new people may decide to buy into your store (The Volume)

    In a nut shell, that’s the bases of a simple stock

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