Demystifying Stock Investing


By: FamilyResource.com

When looking at all the well-dressed businesspeople on the subway, it's hard not to look and wonder, "Could I make it in the business world, investing stocks and reaping dividends?" But then we see what they are reading, lists of stocks in incredibly fine print. It seems like you might need a magnifying glass to figure out what the numbers say at all, let alone figure out what they are trying to tell you.

Luckily, not all of us need to know every twist and turn of the stock market, and that is a good thing for our pockets, and our eyes. Stock investing can be as easy as going down to your local investing office and setting up a fund. The investor will take your money and pool it with other funds, then invest it in stocks that he or she feels with increase in value over time.

But a stock investor will require fees and commissions that may dig into your earnings. If going it alone is right for you, then this is the right place to start.

To begin with, a stock is, in essence, a small part of a company that is available for purchase by the public. Companies become corporations when they begin to offer stock, and the reason they do this is so that they can have more money to invest without actually giving up control of the company.

Although each individual stock investment does represent a portion of the company, in most cases the assets of that company are still controlled by the owners. What your stock entitles you to is a say in the direction the company heads in. Usually, a board of directors will be set up, sometimes voted on by the stockholders themselves, and this boards will make sure that the stockholders interests are kept in mind at all times.

But how do you go about finding the right stock to invest in? Well, this is the trickiest question of them all. Google, Apple, Nike and even Microsoft — all these companies were once offered to the public at low prices, and the people who invested in them became millionaires. Finding the right stock is as easy or as hard as picking the next company that will do what they did.

In addition to that, many corporations offer very high rates of return and established companies will usually present a lower risk for your dollar. But beware; the stock of a large corporation can carry a hefty price tag. Stock investing can be a great way to increase your income, but the risk can be high as well.

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