Business Insurance

 

How to Read Stocks and Actually Understand Them

by Carlie Evie

Reading the stock tables in the newspaper can be very confusing when you're just learning about the stock market. Though it might be intimidating, it's important to learn how to read stocks. Don't worry, it won't take much time.

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. To find out how the stock has been performing over the past year, look at the first two columns-- these will be labeled something to the effect of "52W High" and "52W Low." You'll see the highest point the stock has achieved in the last 52 weeks in the "52W High" column. Its lowest value will be in the "52W Low" column.

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. There's a unique combination of letters for each stock. 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.

Speaking of which, watching the financial shows on these networks will give you further help on how to read stocks and other aspects of the stock market.

There's another column next to the ticker column, and it's labeled "Div." This column shows you the annual dividend the stock pays out for each share. If you see a blank space in this column, that means the stock doesn't pay dividends right now. 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. These are the highest and lowest points that the stock reached in the day's trading. "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.

Visit How to Buy Stocks and get all the free help you need in discovering How to Sell Stock, Stock Market Trends and so much more!

Published December 5th, 2007

Filed in Business, Finance, Management