One of my plans for 2016 is to learn more about stock investing. It can look intimidating, but it is actually not rocket-science. You need to research the companies you want to buy stocks from and you need to understand the stock table.
There are a few additional steps you also need to do, but these 2 are the basics to get you started.
Here is an example of a fictitious stock table:
52-Wk High | 52-Wk Low | Name (Symbol) | Div | Vol | Yld | P/E | Day Last | Net Chg |
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21.50 | 8.00 | ABC Corp (ABC) | 3143 | 76 | 21.25 | +.25 | ||
47.00 | 31/75 | DEF Corp(DEF) | 2.35 | 2735 | 5.7 | 18 | 41.00 | –.50 |
25.00 | 21.00 | GHI Corp (GHI) | 1.00 | 1894 | 4.5 | 12 | 22.00 | +.10 |
83.00 | 33.00 | JKL Corp (JKL) | 7601 | 33.50 | –.75 |
Here is what each column means:
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52-week high: This column gives you the highest price a stock has reached in the most recent 52-week period.
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52-week low: This column gives you the lowest price a stock has reached in the most recent 52-week period.
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Name and symbol: This column tells you the company name (usually abbreviated) and the stock symbol assigned to it. The symbol is also called ticker.
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Dividend: A value in this column indicates that payments have been made to stockholders. The amount you see is the annual dividend quoted as if you owned one share of that stock.
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Volume: This column tells you how many shares of a particular stock were traded that day. If only 100 shares are traded in a day, the trading volume is 100.
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Yield: This column refers to what percentage that particular dividend is to the stock price. Yield is calculated by dividing the annual dividend by the current stock price.
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P/E: This column indicates the ratio between the price of the stock and the company’s earnings. This ratio (also called the earnings multiple or just multiple) is frequently used to determine whether a stock is a good value.
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Day last: This column tells you how trading ended for a particular stock on the day represented by the table. Some newspapers report the high and low for that day in addition to the stock’s ending price.
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Net change: This column answers the question “How did the stock price end today compared with its trading price at the end of the prior trading day?”.
If you invest for dividend income, the yield (Yld) is an important number to look at. The yield should be at least 3% if you are looking for income.
If you are looking for growth, the P/E is a good start.
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