Investors buy stocks to acquire a partial ownership in a particular company and buy bonds to make a loan to corporations or governments. While stockholders benefit from the company profits, the bondholders receive returns. A fixed rated return is a percentage of the bond’s original offering price. The return is called a “coupon rate.” The […]

The statistical average of a particular stock exchange or sector is called a stock index. Indexes are composed of stocks that are either parts of the same exchange, the same industry or the same companies. The most common stock indexes in the United States are the Dow Jones Industrial Average, the NYSE Composite index, and […]

The stock market serves as a reliable indicator the actual value of the companies that issue stocks. Stock values are based on verifiable financial data such as growth, assets, and sales figures. The stock market is considered to be a good choice for long term investments since this reliability that well-run companies should continue to […]

Barrel shooting and trading strategies are the two basic ways of stock market trading. Stock trading strategies are used by investors to determine the stocks to buy and the time to sell. It also helps them protect their investments. Trading strategies outperform barrel shooting by a large margin. The different types of trading strategies, which […]

Skilled investors sometimes base their decisions by reading the different signals that are given off by clearly defined market conditions. Some signals may indicate a favorable time to buy stocks while some may indicate a favorable time to sell. Because the value of particular companies can be watched daily, long-term investors do not consider signals […]

The prospect that a certain stock may split to give the stockholders twice as many shares as they had before is one of the most alluring myths that surround the stock market. Although investors have more stocks after a split, the value of each share they receive is actually reduced. A company that decides to […]

Stock brokers handle most of the buying and selling activities on the stock market. An average investor will hire the services of a broker to handle his trades. A broad range of brokerage services is available nowadays. Full-service brokers can give advice about which stocks to buy or which stocks to sell. They often have […]

Fundamental analysis is one of the most useful tools that investors use when making decisions about which stocks they’re going to buy. It is a process of examining key ratios that show the current worth of a stock and the recent performance of a company. Fundamental analysis is used to determine the amount of money […]

Even if the raw data provided by financial statements contain some useful information, the value of a stock will be easier to understand if a variety of tools is applied to the financial data. Earnings per Share The overall earning is not, in itself, a useful indicator of the worth of a company’s stocks. Low […]

The contracts to buy or to sell a stock at a particular price before a particular time in the future are called stock options. Although the buyers of these options have the right to buy stocks at the specified price, they are not obligated to exercise their options. Sellers of the options, on the other […]