How to Read Stocks With These Simple Tips
If you're just starting out learning how the stock market works, reading the stock tables in the paper can be confusing. Though it might be intimidating, it's important to learn how to read stocks. Don't worry, it won't take much time.
To begin, you'll notice that there are about twelve columns across the table, and each stock has its own line. The first two columns (usually labeled something like "52W High" and "52W Low") are dealing with the stock's performance over the past year. The names are pretty suggestive; "52W High" reveals the highest value the stock has reach in the past 52 weeks. Its lowest value shows up in the "52W Low."
In the follow column you'll see the actual name of the stock. This will be followed by another column that shows the stock's ticker symbol. Each stock has a unique combination of letters. Perhaps you'll even recognize a few (or more than a few) of these tickers. They periodically run across the bottom of the screen of cable news networks.
By the way, watching some of the financial shows could be a good idea. It will further your knowledge even more on how to read stocks and understand the way the market works.
There's another column next to the ticker column, and it's labeled "Div." From this column, you see how much in annual dividends the stock pays out for every share. You'll know the stock doesn't pay out dividends if this particular column is blank. The same rule also applies to the very next column, "Yield %", the percentage return on the dividend.
P/E is the price to earnings ratio. Dividing the current stock price by earnings per share for the last four quarters gives you this number.
"High" and "Low" are the next two columns. In the day's trading, you'll be able to see the highest and lowest points that the stock has reached. "Net Change" shows the change from the day before; "Close" tells you the point when the stock closed for the day.
With a basic understanding of how to read stocks, you can now move on and start learning more about the market itself.
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Published December 5th, 2007
Filed in Business, Finance, Management, Marketing
