Last Updated on November 15, 2019 by Marie Bautista
Okay, so stocks and shares might not be the most fun sounding topic. We generally associate it with rooms of individuals in suits, standing on the phone and shouting numbers and figures at the top of their voices. But you may be surprised to know that if you understand the basics of the stock market, you could earn some sweet cash of your own! You just need to take the mystery out of the subject, and that’s where we come in to help. Here’s everything you need to know to get your head around stocks and shares and use them to your own advantage.
So What Are Stocks?
Let’s get down to the nitty-gritty. After all, there’s no point tiptoeing around the subject! Stocks are an intangible purchase that gives you ownership within a company. You heard us right. Owning stock entitles you to a given share of the company’s earnings and assets.
Why Would a Company Offer This Out?
Now, the first thing that often springs to people’s minds when they hear this is what the catch is.
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Why would a company offer shares of their company out to anyone who’s willing to pay? Well, companies sell stocks to raise cash fast. It’s as simple as that. Perhaps they need to carry out some research. Perhaps they’re developing a new product. Maybe they need to take on new, qualified staff. They might even be considering opening up a new division abroad. Regardless of their business aims, selling shares of their business allows them to progress, taking major steps that would have otherwise been unachievable.
So How Do I Make Money?
Well, once you’ve purchased a stock, its value will change in accordance with the company’s worth. As we’ve just mentioned, companies often offer out stocks because they’re taking big steps. If these steps pay off, your stocks will increase in value. If you have dividend stock, you’ll receive a share of the company’s profits. If you have standard stocks, you can simply sell off the stock while it is valued at a high price, making a profit on what you originally paid for it. This, of course, means that you need to keep an eye on how much your stock is worth. You can use stock ratings to find this information out. Look here for an example of the worth of bud stock.
What are the Cons?
Of course, while stocks can make you a whole lot of money, you can lose money on them too. You never know when prices and values are going to change, which means that you need to be on the ball. Certain stocks can become volatile, spiking and falling quickly. If you manage to sell when it’s at its peak, perfect! But if you miss the opportunity you could find yourself kicking yourself down the line. Sometimes stocks plummet and stay down, meaning that you’ve lost your investment.
This is just a quick run through of stocks and shares. As you can see, they hold potential for you to make a whole lot of easy money. You just need to be careful with where you invest and how much you put in!