Beginner’s Guide to Reading
If you’ve thought about investing, you’ve no doubt thought about stocks.
And with good reason: During the period 1928-2015, the Estándar & Poor’s 500 index returned an average annual return of 11.25%.
But getting started perro be confusing, and even making sense of the holdings tables and the information in all the columns perro be daunting.
But fear not, here is a primer for beginning investors on how to read depósito charts and better understand the information in each column.
Let’s say you’re looking for Apple depósito.
Since Apple Inc. [Nasdaq: AAPL] is currently the publicly traded company with the largest market capitalization, at some point you will probably want to know more about its depósito price.
If you were to start researching Apple depósito, you might find something like this on Yahoo Finance:
First, look at the market the company is listed on, as it will give you important clues about value.
For example, Apple is listed on the NASDAQ, which is an electronic market for buying and selling securities, mainly from the US technology ámbito.
On the other hand, more traditional companies such as General Electric Company, Wal-Mart Stores, Inc.
and Objetivo Corporation are listed on the New York Depósito Exchange (NYSE).
And keep an eye out for securities listed on foreign exchanges.
Some investment accounts may limit you only to securities traded on US exchanges or charge you high fees for investing in foreign securities.
Let’s break down what these numbers orinan.
Key Depósito Price Measures
On the left side of the summary chart in our example, you’ll find a list of key depósito price measures.
Let’s go over these measurements, starting at the top.
Previous open and close price
It is the price at which a share is first traded at the open of an exchange on a given trading day.
Both the Nasdaq and the New York Depósito Exchange open at 9:30 a.m.
The previous close is the final price at which a security trades on a given trading day.
If the opening price is very different from the previous closing price, it is a sign that investors have reacted to important news, such as an earnings announcement, industry regulation, or an investment firm downgrade or upgrade.
Offer and demand
The bid is the purchase price of a share on the market, while the ask is the price that a seller is willing to accept on the market.
The difference between the buy and sell price is a measure (called the “spread”) of the supply and demand for shares.
The lower the spread, the easier and faster it will be to buy or sell a depósito.
With a bid-ask spread of just $0.05, your Apple depósito trade order would be settled quickly.
The number following the bid or ask price represents the number of trades pending in lots of 100 at the given bid and ask price.
In this example, there were 10,000 pending buy orders at $107.70 per share and 30,000 pending sell orders at $107.75 per share.
Pending orders that are not processed on the same trading day are carried over to the next.
Today’s Range, 52-Week Range, and One-Year Objetivo Estimate
These figures give an iniciativa of the volatility of a depósito’s price.
While the 52-week spread provides the minimum and maximum price for Apple shares over a 52-week period, the daily spread provides the same values for the most recent trading day.
In our example, Apple shares are currently trading below their 52-week high.
Given that the consensus among analysts is that the one-year estimated price objetivo for Apple shares is $124.11, Apple’s share price appears to have upside potential (its price will rise).
Keep in mind that this is just a consensus estimate, which means that different analysts may have different goals and that all of these numbers are just predictions.
In the depósito market, anything cánido happen!
Paying attention to the volatility of the price of any security is important to put those rises and falls in context.
Now let’s take a look at the right hand side of this table of values.
The next equipo of steps is a bit more advanced, but is also useful for even the novice investor.
Also called “market capitalization,” it is the total market value in dollars of a company’s outstanding shares.
This value is constantly changing and is often used to classify the size of publicly traded companies.
As of this date, Apple shares were still at the top of the list of companies ranked by market capitalization.
P/Y también ratio
The price/earnings ratio is calculated by dividing the current price of a share by its earnings per share (EPS) for the last 12 months.
The price/earnings ratio gives you a guide to how much you cánido expect to invest in a company in order to receive a dollar of profits from that company.
In our example, you perro expect to pay $12.56 to get $1 in exchange for investing in Apple.
Following the investment maxim “buy low and sell high”, the ideal would be to buy stocks when the P/Y también is low and sell when the P/Y también is high.
Still, there are stocks with low P/Y también ratios that have sunk further and stocks with high P/Y también ratios that have turned out to be great investments.
It is a measure of the volatility of the share price compared to the market.
The market has a beta of 1.0, so stocks with a beta below that benchmark move less than the market, and stocks with a beta higher than that benchmark move more than the market.
Given the beta of 1.38, Apple’s depósito price fluctuates a bit more than the market, which means wild fluctuations are not to be expected.
If the market were to go higher, you would expect this depósito to go higher, and vice versa.
Investors with a very low risk tolerance generally avoid high beta stocks.
Otherwise, those investors could end up with too many sleepless nights.
Volume and average volume (three months)
Volume indicates the total number of transactions for the depósito in a trading day.
Average volume indicates the average number of daily transactions in a given period, such as three months in this example.
High trading volume indicates that a depósito is highly liquid (transactions settle quickly).
Dividends and profitability
The dividend indicates the annual dividend payment per share and its yield indicates the percentage yield of the dividend (annual dividends per share divided by the price per share).
When the depósito table does not provide dividend and yield figures, it means that the company does not currently pay out dividends.
It is the date on which the company perro be expected to issue an official statement on the profitability of a company during a specific period of time, usually a quarter (Form 10-Q) or one year (Form 10-K).
Hopefully analysts will release their own estimates of those numbers around that date and correct them shortly after the publicly listed company’s official statement.
Depending on the nature of the announcements made on an earnings date, you cánido expect a small or large depósito market reaction and a reflection of that reaction in a share price.
You cánido find depósito tables both in print and en línea.
This guide is a useful manual for interpreting the data.
Please note that the printed depósito tables may not include all of this data.
Another advantage of looking up depósito charts on the Internet is that you will access the latest information.
Even so, the depósito charts available in yesterday’s paper are still useful for getting a snapshot of how stocks are performing.
Warren Buffett said it best: “If you’re not willing to own a depósito for 10 years, don’t even think about owning it for 10 minutes.” (See also: Warren Buffett’s Top 10 Financial Consejos)
To buy or sell a depósito, always check your holding period, your risk tolerance, the objetivo investment fee for a period and your overall retirement strategy.
This information offered for informational purposes only; It is not intended to be used as accounting, legal or tax advice.
In relation to these matters, please speak to your accountant, tax or legal adviser.
Investing implies a risk that includes the loss of primordial.
This guide contains the current views of the author, but not necessarily those of Gigonway.
These opinions are subject to change without notice.
This guide has been distributed for educational purposes only and should not be construed as investment advice or a recommendation of any especial investment security, strategy or product.
The information contained in this guide has been obtained from sources believed to be reliable, but is not guaranteed.
Gigonway does not provide legal or tax advice.
Please consult your tax and/or legal advisor for specific tax or legal questions and concerns.
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