May 2, 2008

How to Read Stocks and Actually Understand Them

by Carlie Eviee

Reading the stock tables in the newspaper can be very confusing when you’re just learning about the stock market. It’s important to learn how to read stocks, though, and it won’t take a lot of time.

Let’s look closer at the table. You’ll notice that there are twelve columns in the table; each stock has a line of its own. Let’s examine the first two columns, which are usually named something like “52W High” and 52W Low.” These tell you about the stock’s performance over the last year. The names are pretty suggestive; “52W High” reveals the highest value the stock has reach in the past 52 weeks. Its lowest value shows up in the “52W Low.”

The column after that you will discover the name of the stock and then the ticker symbol for that stock. You will probably recognize some of these from the tickers that run across the bottom of the screen sometimes on the cable news networks.

Speaking of which, watching the financial shows on these networks will give you further help on how to read stocks and other aspects of the stock market.

There’s another column next to the ticker column, and it’s labeled “Div.” This column shows you the annual dividend the stock pays out for each share. If you see a blank space in this column, that means the stock doesn’t pay dividends right now. The same rule also applies to the very next column, “Yield %”, the percentage return on the dividend.

The earnings ratio is indicated by P/E. You get this number by dividing the current stock price by the earnings per share for the last four quarters.

“High” and “Low” are the next two columns. You’ll be able to see the lowest and highest point the stock has reached in the day’s trading. “Net Change” shows the change from the day before; “Close” tells you the point when the stock closed for the day.

Once you’re armed with a good working knowledge of how to read stocks, you can begin to delve into other aspects of the market.

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