Buy Low, Sell… Never?
The stock market was originally designed as a method for start-up companies to earn money to re-invest in their business. A very simple premise, but over time, this has evolved into a much more complex financial entity.
Whether reflecting the vibe of the national and international economy, posing huge losses or gains through stop puts or shorting, or simply serving as an accurate reflection of a corporation’s stability, the stock market has proven itself to be more than just a place for new companies to find capital.
As the stock market is one of those omnipresent entities that encompass several areas of the financial community, trying to master all aspects of the stock market can be an exercise in futility, especially if you’re new to the game.
That’s not to say that the novice investor cannot find a way to invest in stocks on his own. Rather, if you are interested in investing in stocks, the best way to start is by working with a basic premise. One premise that’s simple to grasp is the distribution of dividends.
When new companies find investors to put their money into a certain stock, the potential behind the investment is to reap the financial rewards or profits that a company earns. A profit is anything above and beyond the cost of operating a business.
Typically, a company will reinvest the money that they’ve made in order to make necessary improvements in their operation, but if they have stock holders, they will also divide and distribute some of the wealth received.
There are three questions to ask when deciding what stock to invest to reap the dividends:
Pay schedule:
Dividends are a set amount of money a corporation will pay out on a certain pay schedule. This might be quarterly, bi-annually or annually. If you are living off of your dividends, the date of receipt is something to consider.
How much per share:
Decide how much money you plan to invest and the percentage of return you would like to get back from your investment. For example, if you have ten thousand dollars you want to invest in the stock market, you will want to find dividends that pay out more than the interest on a CD or savings account. Research the stocks that pay a dividend large enough to support your goal.
Stock stability:
Although nothing is guaranteed in the stock market, estimating the stability of a stock can be done based on past history and future projections. If you are simply investing to reap the rewards of dividends, investing in a stock that has constant ups and down is not a strong choice.
Choose companies that are stable, steady and will continue to pay out your dividend long term. Otherwise, you risk losing the money you came in with.
Regardless, losing your investment capital is always a risk. That’s why the stock market is considered a somewhat risky investment. The amount of money to be made through dividends is a strong investment option, just be certain to carefully weigh the risks and rewards before making your first investment.
Whether reflecting the vibe of the national and international economy, posing huge losses or gains through stop puts or shorting, or simply serving as an accurate reflection of a corporation’s stability, the stock market has proven itself to be more than just a place for new companies to find capital.
As the stock market is one of those omnipresent entities that encompass several areas of the financial community, trying to master all aspects of the stock market can be an exercise in futility, especially if you’re new to the game.
That’s not to say that the novice investor cannot find a way to invest in stocks on his own. Rather, if you are interested in investing in stocks, the best way to start is by working with a basic premise. One premise that’s simple to grasp is the distribution of dividends.
When new companies find investors to put their money into a certain stock, the potential behind the investment is to reap the financial rewards or profits that a company earns. A profit is anything above and beyond the cost of operating a business.
Typically, a company will reinvest the money that they’ve made in order to make necessary improvements in their operation, but if they have stock holders, they will also divide and distribute some of the wealth received.
There are three questions to ask when deciding what stock to invest to reap the dividends:
- What is the dividend pay schedule?
- How much will I earn per share?
- What is the stability of my stock?
Pay schedule:
Dividends are a set amount of money a corporation will pay out on a certain pay schedule. This might be quarterly, bi-annually or annually. If you are living off of your dividends, the date of receipt is something to consider.
How much per share:
Decide how much money you plan to invest and the percentage of return you would like to get back from your investment. For example, if you have ten thousand dollars you want to invest in the stock market, you will want to find dividends that pay out more than the interest on a CD or savings account. Research the stocks that pay a dividend large enough to support your goal.
Stock stability:
Although nothing is guaranteed in the stock market, estimating the stability of a stock can be done based on past history and future projections. If you are simply investing to reap the rewards of dividends, investing in a stock that has constant ups and down is not a strong choice.
Choose companies that are stable, steady and will continue to pay out your dividend long term. Otherwise, you risk losing the money you came in with.
Regardless, losing your investment capital is always a risk. That’s why the stock market is considered a somewhat risky investment. The amount of money to be made through dividends is a strong investment option, just be certain to carefully weigh the risks and rewards before making your first investment.