Our next few blogs are going to answer some of your questions about stocks, such as: what are they, how to buy them, why you need to understand them, and why you should own them.
What is a stock? When you go out and purchase or buy stock, you actually own a slice of the company. It may just be a small piece of the company but you are still considered having ownership. You can purchase stock through a financial advisor (broker) or open an account with an online brokerage firm and do it yourself. It is actually fun, easy, and quite powerful! By the way, stocks are also referred to as shares or equities.
You as an investor, primarily receives the opportunity to earn (or lose) money based on the share value at the time they choose to sell the stock. Over time, the reason for buying any company’s stock is the hope that its revenues grow and the value of your shares increase in the process. To help us truly understand how this works, we are going to use McDonalds Corporation in our next 5 blogs as a guide and pretend we own 100 shares and we purchased it at $95.00 per share. So, the total cost of our purchase is $9,500. With me so far?
I am going to try to make this so easy to understand and make those who don’t own stocks wonder why they aren’t in the game! Send in any questions or comments that you have.