How to Read Stocks

Last week I suggested that you stop messing around with low-earning savings accounts and started getting real with investments. This often involves investing in the stock market. While you don’t have to spend your mornings laboring over the New York Times stock pages, it does help to be able to read stock listings.

So, today, we are going to have a looksee at old-fashioned paper stock listings.

The image shown is a sample stock table. Below are the corresponding definitions of each column (left to right ).

52-Week High and Low—The highest and lowest prices at which a stock has traded over the previous 52 weeks (one year). This typically does not include the previous day’s trading.

Stock—Company name.

Ticker—The unique alphabetic name which identifies the stock.

Dividend Per Share—The annual dividend payment per share. If this space is blank, the company does not currently pay out dividends.

Dividend Yield—Calculated as annual dividends per share divided by price per share.

Price/Earnings Ratio—Calculated by dividing the current stock price by earnings per share from the last four quarters.

Trading Volume—The total number of shares traded for the day, listed in hundreds. To get the actual number traded, add “00” to the end of the number listed.

Day High and Low—The maximum and the minimum prices paid for the stock throughout the day

Close—The last trading price recorded at market closing.

Net Change—The dollar value change from the previous day’s closing price.

If the closing price is up or down more than 5% than the previous day’s close, the entire listing for that stock is bold-faced. Keep in mind, you are not guaranteed to get this price if you buy the stock the next day because the price is constantly changing (even after the exchange is closed for the day). The close is merely an indicator of past performance and except in extreme circumstances serves as a ballpark of what you should expect to pay.

If you don’t know what a particular company’s ticker is you can search for it at: http://finance.yahoo.com/l.

Now that you understand how to read newspaper stock listings, you can apply what you know to internet listings.

 

Data is interpreted in the same way, but is updated several times throughout the day and typically includes more information as well as charts.

Reading stock results isn’t that difficult once you simplify and understand the jargon.

  

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