Stock Market Investing for Beginners

The stock market is the accumulation of buyers and sellers of shares listed in the stock exchange. These shares are equity that buyers have in the corporation. In other words ownership of a corporation; the claim one has to a portion of the corporation's assets. Therefore, the more stock you own the more ownership in the corporation you have.


Understanding the stock market can be very confusing and time consuming. This guide is intended to give you an introductory look into the stock market and how it functions. If you are looking to invest, Acorns Investing is a fantastic portfolio management company that can help you with all of your needs.

The first thing you need to understand is that every single stock is publicly traded and has its own unique ticker symbol. The symbol is what holds the vital information behind the stock such as charts and data related to the price of the stock and if it gained or lost in price. There is an arrow that is either up or down indicating whether the stock has seen a gain or a loss with the amount in dollar value next to it and a percentage in parentheses with the difference in price. Below these numbers are very similar numbers, but those that occurred outside of regular business hours called ‘after hours'. This helps buyers and sellers understand what might happen in the future.

Next, you need to understand what the Prev Close number means. This number is what the stock price was at when the market closed the day before. Stock market hours are 9:30 am EST to 4:00 pm EST. Therefore, the Prev Close number is the stock price at 4:00 pm EST.

After that you will see an Open price. This price is the price of the stock when the market opened that day. Therefore, the price of the stock at 9:00 EST on the current day.

Then you will have the Bid and Ask prices. The bid price is the highest a potential buyer is willing to buy a stock for and the quantity of stock. The Ask price is the lowest amount a seller is willing to sell a stock for. A broker uses those two numbers to match buyer and seller transactions. The stock market is a gigantic auction in other words. Who is willing to buy and sell at the right price.

After these prices you will see the 1y Target Est. This is the one year target estimate which is simply an estimate at which the stock price will be one year from date. Honestly, this is anyone's guess and is simply a gamble. The price of stocks rise and fall every day. Guessing what a stock price will be a year out is predictive at best. There is no guarantee, just like predicting a football game score or the wind for tomorrow. It is hard to predict, but analysts do their best.

This brings us to another statistic - Beta. Beta is the volatility of a stock. It measures the history of a stocks movement. The greater the Beta the greater the volatility than an average stock. Low Beta numbers means less volatility of the stock.

The Day's Range is a ticker that simply tells you the stock price's low and high for the day. More simply put, what the lowest stock price was for the day and what the highest stock price was for the day. The 52wk Range indicator has the exact same mentality, except that it looks at the stock's price for an entire 52 week period.

Volume refers to the amount of shares that have been bought and sold that day. Understand that the volume of a stock may be high while the volatility is low. The data for stock also includes an Avg Vol (3m) that shows how active a stock has been the last three months. Instead of a days' worth of buys and sells, it is three months' worth.

The Market Cap indicates the number of shares outstanding multiplied by the price of the stock. This is the dollar value of outstanding shares. P/E (ttm) reflects the Price to Earnings. A low P/E is more favorable than a high P/E. Another income estimating tool that is shown is the EPS (ttm), the Earnings per Share indicator. Last, the Div & Yield indicator is the amount the corporation pays out in dividends.

Each of these indicators is an important piece in understanding the overall goal of investing. It is important that you understand the data before you start investing. Make sure you know how to read and interpret the numbers so that you invest wisely.

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