How to Read Stocks and Actually Understand Them
Reading the stock tables in the newspaper can be very confusing when you’re just learning about the stock market. It’s important to learn how to read stocks, though, and it won’t take a lot of time.
There are twelve columns in the table, and you’ll notice that each stock has its own line in this table. To find out how the stock has been performing over the past year, look at the first two columns– these will be labeled something to the effect of “52W High” and “52W Low.” You’ll see the highest point the stock has achieved in the last 52 weeks in the “52W High” column. Its lowest value will be in the “52W Low” column.
In the following column you’ll see the actual name of the stock. This will be followed by another column that shows the stock’s ticker symbol. There’s a unique combination of letters for each stock. In fact, you might be able to recognize some of them. Maybe you’ve seen the tickers running across the bottom of the screen when you watch the news.
Speaking of TV, you might want to watch the financial shows. They can give you a lot of help and information that will show you how to read stocks and understand the stock market even better.
“Div” is the column that comes after the ticker column. From this column, you see how much in annual dividends the stock pays out for every share. You’ll know the stock doesn’t pay out dividends if this particular column is blank. The percentage return on the dividend shows up in the “Yield %” column, though it too will be blank if the stock doesn’t pay out dividends.
P/E is the price to earnings ratio, which is calculated by taking the stock prices and dividing it by the the earnings per share over the last four quarters.
“High” and “Low” are the next two columns. You’ll be able to see the lowest and highest point the stock has reached in the day’s trading. “Net Change” shows the change from the day before; “Close” tells you the point when the stock closed for the day.
Once you’re armed with a good working knowledge of how to read stocks, you can begin to delve into other aspects of the market.
