How to Read Stocks and Actually Understand Them

When you're first learning about the stock market, the stock tables in the paper can be quite confusing. Learning how to read stocks won't take much time, though, and it's very important.

Let's look closer at the table. You'll notice that there are twelve columns in the table; each stock has a line of its own. Let's examine the first two columns, which are usually named something like "52W High" and 52W Low." These tell you about the stock's performance over the last 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."

The column after that you will discover the name of the stock and then the ticker symbol for that stock. You will probably recognize some of these from the tickers that run across the bottom of the screen sometimes on the cable news networks.

Speaking of TV, you might want to watch the financial shows. They can give you a lot of help and information that will show you how to read stocks and understand the stock market even better.

"Div" is the column that comes after the ticker column. 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 percentage return on the dividend shows up in the "Yield %" column, though it too will be blank if the stock doesn't pay out dividends.

P/E is the price to earnings ratio, which is calculated by taking the stock prices and dividing it by the the earnings per share over the last four quarters.

The next two columns are "High" and "Low." In the day's trading, you'll be able to see the highest and lowest points that the stock has reached. "Close" is the point at which the stock closed that day, and "Net Change" shows the change from the day before.

You'll be able to move on and learn even more about the stock market once you have a basic understanding of how to read stocks.

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