INVESTING?
INVESTING is when you buy (something) whose usefulness will repay the cost.
(www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=define+investing)
It's basically when you buy items (anything, houses, stocks, etc.) for a low price, and sell for a high price. It's when you put your money into something that has risk of making or losing more money.
(www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=define+investing)
It's basically when you buy items (anything, houses, stocks, etc.) for a low price, and sell for a high price. It's when you put your money into something that has risk of making or losing more money.
BUY LOW, SELL HIGH.
STOCKS?
WHAT ARE STOCKS?
Stocks are when you pay for a share, or a small portion of ownership in a public company, business, etc. (buying in the stock market) When buying a stock, you should buy it for a low price. If you decide to sell a stock, you should sell it for a higher price than you bought it for.
WHO's THE OWNER THEN?
If you own a share (a stock, of a public or private company), then you are an owner.
DO YOU HAVE COMPLETE CONTROL?
If you own a share, do you have say in the business or company's choices? The answer varies. The more shares you own, the more control you have. If you own 67 shares in Netflix's stock, and 2 shares in Microsoft's stock, you have more say in Netflix's decisions, but you do not have full control.
PRIVATE VS PUBLIC
Public companies allow anyone to buy shares. Private companies only have a small amount of shareholders, who do not allow anyone to buy or trade stocks. (shares)
FOUR IDEAS TO INVESTING:
RISK.
RETURN.
VOLATILITY.
LIQUIDITY.
RISK.
Investing is full of risks. If you're not willing to take a risk, you might as well start saving instead. The stock market's prices fluctuate frequently, you'll never know exactly what could happen.
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RETURN.
When you invest in a stock or house, etc., you can get money in return. Return is what you make in a investment. If you made $100,000 in an investment, and made 10% in returns, you'd make $10,000 in return.
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VOLATILITY.
VOLATILITY is the rate at which the price of a security increases or decreases for a given set of returns. (http://economictimes.indiatimes.com/definition/volatility)
Volatility is how often (in stocks) a stock price fluctuates.
Volatility is how often (in stocks) a stock price fluctuates.
This is MMS's stock prices over the past year. You can see this stock is volatile. It appears to rise and fall repeatly. The red circles mark where the stock price fell.
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This is CSX's (CSX Corp) stock prices from the past year. This stock is non-volatile. The price does not increase or decrease by large sums.
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VOLATILE STOCKS ARE EXCITING.
NON-VOLATILE STOCKS ARE STEADY.
NON-VOLATILE STOCKS ARE STEADY.
LIQUIDITY.
LIQUIDITY is basically how fast you can get cash (into your hand.) ATMs are more liquid than a house investment. You can visit an ATM at anytime, and get cash whenever you want or need to. A house investment takes time and a process. If something is liquid, then it's something you can access easily.
DIVIDENDS
DIVIDENDS are the sum of money paid regularly by a company to its shareholders out of its profits.
(https://www.google.com/webhp?sourceid=chrome-instant&rlz=1C1GIWA_enUS645US645&ion=1&espv=2&ie=UTF-8#q=define+dividends&*)
If a business or company did well during the year (or period of time) the dividend would go up; If it didn't do well, it would drop.
(https://www.google.com/webhp?sourceid=chrome-instant&rlz=1C1GIWA_enUS645US645&ion=1&espv=2&ie=UTF-8#q=define+dividends&*)
If a business or company did well during the year (or period of time) the dividend would go up; If it didn't do well, it would drop.
Sucessful, old companies must use dividends to attract shareholders. They make plenty of money, have products, and are known worldwide; they cannot expand anymore, they're already at the top. Companies like Coca-Cola or McDonalds must give out dividends in order for people to buy their stocks. For every share you own, you get one dividend.
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Coca-Cola's dividends.
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McDonald's dividends.
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(about to be: $0.37)
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(about to be $0.94)
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CHECK YOUR OWN STOCKS.
WHAT ARE MUTUAL FUNDS?
MUTUAL FUNDS are a collection of stocks and/or bonds. It's like a company that brings a group of people together and invests their money in stocks. (http://www.investopedia.com/university/mutualfunds/mutualfunds.asp)
When you buy a mutual fund, you must pay a fee. A company will use the fees (the money) to invest in hundreds of stocks. You literally pay people to invest in stocks, diversify your stocks (investments), and make money for you.
DIVERSIFICATION.
DIVERSIFICATION is when you spread out your risks. It's when you own as many as stocks (investments) as you can. You have a variety or diversity of stocks. You should never only invest in one stock. WHY? If that stock drops or decreases, you lose everything. If you invest in mutiple stocks, you won't lose everything, and it's much more balanced.
Mutual funds help diversify your stocks. HOW? Each fund already owns multiple stocks. It spreads out your 'risks.' (https://www.forbes.com/2006/08/23/mutual-funds-in_wh_0822investools_inl.html)
THE RULE OF 72.
What is the rule of 72? Well, many investors use the rule of 72 to figure out the number of years it will take for their money to double. The rule is: 72 / % of return = number of years for your money to double.
STOCK DATA.
In this excel spreadsheet I analyzed 5 different companies' stocks and performance over the past two decades. This includes; MSFT, KO, T, GE, XOM.
Stock Data Research.xlsx | |
File Size: | 49 kb |
File Type: | xlsx |