MORE than half of Americans have stocks in their portfolio. If you don’t, you are missing out. Actually, you have been missing out big time. Conservative people keep their money in Certificates Of Deposit (CD). Conservatism is noble but earning 1% – 2% in a savings account is kind of silly when stock investors earn 8% – 12% in the stock market. Here are some Questions and Answers (Q&A) for you.
What is a stock?
A stock represents a share of ownership in a company. Stocks are sold as individual shares.
Why do companies sell stocks?
Companies issue stocks to raise capital which is used for research, expansion, and marketing.
How do I make money on stocks?
Buy stocks at a certain price and sell them later at a higher price. Buy low and sell high. Collect dividends.
What are dividends?
A dividend is a portion of a company’s earnings that’s distributed to shareholders. Companies don’t have to pay them but some do. If you buy stocks of a company with a long history of paying dividends, you can have a reliable source of income.
Where do you buy and sell stocks?
Trade stocks on a public exchange such as New York Stock Exchange (NYSE) or Nasdaq. You need a broker to buy and sell stocks.
What are the types of stock?
There are two types of stock: common stock and preferred stock.
• A common stock represents an ownership share in a given company. When you buy shares of common stock, you get voting rights.
• A preferred stock also represents an ownership share in a company that entitles you to a predetermined dividend that’s larger than what common stockholders receive.
How do I research Stocks?
What used to be a daunting task to research printed materials that arrived by postal mail is now at your finger tips via search engines such as Google, Yahoo or MSN. Subscribe to Investopedia, Market Beat, The Street, Motley Fool, Zacks, and other research websites.
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.
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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies. He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at [email protected].