Before you can get into trading stocks, you must know how to choose them. You need a deep understanding of a particular company’s financial statements and annual report. The goal is to understand how the stocks represent a company and determine the stock’s true value, ensuring that you can make a better investment decision.
Financial terms are prevalent when dealing with stocks, so it’s helpful to learn some of the most popular and what they mean. For example, earnings per share means the total company’s profit, which is divided by the stock shares that are outstanding.
Going public means that the company has an IPO of its stock. IPO means Initial Public Offering, which is when the company sells shares of its stock the first time. Market Cap (Capitalization) is the amount of money you pay if you purchased every single stock share in the company. You can calculate the market cap by multiplying the price per share and number of shares together.
Introduction to the Market
Now that you understand a few of the terms and how they compare, you need to learn about the stomach market. It’s highly confusing for most and people consider it a type of gambling.
Fears of losing can stem from stories of others who lost a lot of money during the Great Depression or throughout the years. However, feelings aren’t necessarily facts. The goal isn’t to pop in and out of stocks or shares; you want to invest in the long-run. If you’re completely unsure of what to do, it can be helpful to use a broker, such as EuropeFX.
They can help you determine which stocks and companies are right for you to invest in now and can help you choose how much money to invest. Of course, the final decision is yours, but they can give you advice.
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