Introduction How Dividends Work With Stocks When you buy shares of a company, you may make money in two main ways: the stock price can increase, or the company can distribute part of its profits to shareholders through dividends. Dividends can provide investors with a source of income while they own shares. Some companies pay…
Stocks vs Bonds: What’s the Difference? Investors have many choices when deciding where to put their money, but stocks and bonds are two of the most common types of investments. Although both can be used to build an investment portfolio, they work in fundamentally different ways. When you buy a stock, you generally purchase an…
Stocks vs ETFs: What’s the Difference? When you start investing, you may come across two common choices: individual stocks and exchange-traded funds (ETFs). Both can be bought and sold through a brokerage account, and both can potentially help investors build wealth over time. However, they work in very different ways. When you buy an individual…
Introduction Buying a stock should not begin with a random ticker symbol, a social media recommendation, or a prediction that the price will rise. Before investing, it is important to understand what the company does, how it makes money, how financially healthy it is, what the stock is worth, and what could go wrong. Learning…
Introduction A stock rises when buyers are willing to pay higher prices for it than they were previously. At the most basic level, stock prices are influenced by supply and demand. When demand for a stock increases and buying pressure becomes stronger than selling pressure, its market price can move upward. However, demand does not…
Introduction Choosing stocks for long-term investing is not simply about finding companies whose share prices are rising today. Long-term investors are generally looking for businesses that can remain financially healthy, competitive, and capable of creating value over many years. The challenge is that thousands of publicly traded companies are available across different industries and markets….
Introduction Buying a stock means buying an ownership interest in a company. For that reason, researching the company behind the stock is one of the most important steps an investor can take before making an investment decision. A stock may be rising quickly, attracting attention online, or trading at what appears to be a low…
Introduction A stock has value because it represents an ownership interest in a business. When investors buy shares, they are purchasing a claim on a portion of the company’s future economic benefits, subject to the rights attached to those shares. But what actually makes one stock valuable while another trades at a much lower price?…
Introduction Buying a stock is only one part of investing. At some point, investors may decide to sell their shares to take a profit, reduce risk, rebalance their portfolio, or use the money for another financial goal. For beginners, however, selling stocks can feel more complicated than buying them. Questions such as “When should I…
Introduction When you buy a stock, you are not simply purchasing a number on a brokerage screen. You are purchasing an ownership interest in a company. The size of that ownership depends on how many shares you own compared with the company’s total outstanding shares. Even if you own only a small number of shares…