What Is a Stock And How You Make Money? — Vannie Sloune Finance Blog
When you always buy stock in a company let’s say like in apple, , Facebook or Google, it means that now you become the owner and you get a tiny fraction of that company you invest in. The unit you own is called a share if you own many units it means you have shares. If by luck the company is successful enough and makes more money enough, it means you make enough money too.
Two Popular ways your stocks makes IncomemMoney:
1. When the value of your shares goes up:
If investors think that the company will be profitable sooner or in the sooner future, that means share prices will actually rise. By that it means you will then be able to sell your shares for a profit.Sounds good right? Yeah.
2. When the stock pays dividend:
Some cooperations, but not all, always pass a portion of their profits on to shareholders by paying dividends. As a stocker you are likely to get dividends if you invest it in large amounts, established company than a smaller one with big growth potential that needs to reinvest its profits.
Don’t forget that when you invest in stocks you also take on a risk. You should note that if the company doesn’t do well, you could lose money. And if you own stock in a company that declares bankruptcy, your shares will probably become worthless, have you understood that?That means even if the company doesn’t close, your money will look like nothing. This is because during bankruptcy, shareholders get paid only after creditors and bondholders have been paid in full.
So, where are you headed to to stock investing or to broke party? Think about the direction you are heading to. Invest in Stock Trade, Enjoy The incoming Profits.
Originally published at https://vanniesloune.com on April 14, 2021.