Stocks

Buying Stocks

Buying stocks isn't hard, but the process has its own rules, its own language and a special cast of characters.

A broker, originally, was a wine seller who broached - broke open - wine casks. Today's broker has a less liquid but often heady job as a financial agent.

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Clearance and Settlement

A lot happens between the time you place an order and the time you own the stock.

Once your broker executes your order to buy or sell a stock, your decision making is over — but the trade has just begun.

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Evaluating Companies

How can you tell if a company has the potential to be a good investment?

Evaluating a company means taking a close look at what that company makes or sells, how the company is managed, what it earns, the amount it owes, and how it performed during the ups and downs of the last full economic cycle.

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Fundamental and Technical Analysis

There's more than one way to evaluate a stock.

Following the old adage, "Buy low, sell high," isn't as simple as it sounds.

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Getting Stock Information

Up-to-date information is the lifeblood of stock trading.

What was once reported on ticker tape is now completely electronic.

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Initial Public Offerings

The first time a company issues stock, it’s called going public.

Going public, or taking a company public, means making it possible for outside investors to buy the company’s stock.

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Market Cycles

Stock market ups and downs can't be predicted accurately — though they often can be explained in hindsight.

The stock market goes up when investors put their money into stocks, and it falls when they take money out.

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Markets and Exchanges

Today's markets are a dynamic mixture of tradition and innovation.

A stock transaction may take place on the floor of a traditional exchange, as the result of a telephone or electronic communication between two brokers, or whenever a buy order is matched electronically with a sell order.

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Public and Private Companies

There's a range of differences between what’s public and what’s private.

The terms public and private have a range of opposite meanings that are relevant to a discussion of stock.

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Reading the Stock Tables

The stock tables keep investors up to date on what's happening in the market.

You can find summaries of trading activity for the previous trading day in the financial pages of major newspapers.

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Selling New Stock

The first time a company issues stock, it's called going public.

Going public, or taking a company public, means making it possible for outside investors to buy the company's stock.

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Sifting Stock Information

There are plenty of resources to help you make informed investment decisions.

If you are considering individual stocks for your investment portfolio, there's a great deal of information readily available to help you evaluate the companies that issue them and the prospects for the stocks' future performance.

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Stocking up on Stocks

Stocks historically have had the strongest overall performance record, but they're not predictable.

Many people equate investing with buying stock, and for good reason. Stock has, over time, produced stronger returns and produced them more consistently than any other investment.

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Stocks Sharing a Corporation

Stocks are pieces of the corporate pie. When you buy stocks, or shares, you own a slice of the company.

Stocks are equity investments. If you buy stock in a corporation, you have an ownership share in that corporation and are described as a stockholder or shareholder.

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The Right to VOte

Owning stock gives you the right to vote on important company issues and policies.

As a stockholder, you have the right to vote on major policy decisions, such as whether a company should issue additional stock, sell itself to outside buyers, or change the board of directors.

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The Stock Market

Stocks change hands every trading day on traditional and electronic markets.

The first stock exchange in America was organized in Philadelphia in 1790.

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The Value of Stock

A stock's value can change at any moment, depending on market conditions, investor perceptions, or a host of other issues.

A stock doesn't have a fixed price, or value. When investors are buying the stock, the price tends to go up.

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The World of Stocks

Understanding the wide variety of stocks you can purchase is one key to successful investing.

When you're choosing stocks from among the thousands that are available in the United States and around the world, you can narrow the field in many ways.

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Tracking the Markets

A stock market index is a gauge of what’s up and what’s down.

Stock indexes and averages track day-to-day changes in the prices of groups of stocks and report longer-term trends in the stock markets.

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Trading on a Traditional Market

A stock exchange is both the activity of buying and selling and the place where those transactions take place.

The New York Stock Exchange (NYSE), the largest traditional exchange in operation, provides the facilities for stock trading and rules under which the trading takes place.

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Trading on an Electronic Market

Thousands of stocks are traded electronically—using computers and telephones—on the Nasdaq Stock Market.

The most obvious difference between a traditional and an electronic market is where transactions take place.

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