Why do people buy stocks?
People invest in shares to generate returns. You can profit from owning shares in two ways:
- Companies can decide to return money to their shareholders via dividends. This is cash that is paid to investors for each share that they own.
- If the value of the shares increase. When investors sell their shares, they pocket the difference between the price at which the shares were bought versus when they were sold.
Nonetheless, people can lose money when investing in shares if the price at which they sell the stock is inferior to the price at which they bought it in addition to any costs associated with purchasing, owning and selling these shares.
Introduction to stock trading
- What is a stock?
- Where do stocks come from?
- What is stock ownership?
- Why do people buy stocks?
- How could you lose money from buying stocks?
- What are stock markets?
- What is a stock broker?
- What is a stock price?
- What is a bid-offer spread?
- What are stock charts?
- What is commission?
- What are bullish vs bearish markets?
- What is technical analysis?
- What is fundamental analysis?
- What are analyst recommendations?
- What are stock financials?
- What is EPS (earnings per share)?
- What is a P/E ratio (Price-to-Earnings)?
- What is a P/CF ratio (Price-to-Cashflow)?
- What is ROE (Return on Equity)?
- What is Market Sentiment?
- What are Market Sentiment Indicators?
- What is the VIX?
- How does News and Social Media impact stocks?