Basic Stock Tips

What is the difference between private placements and an IPO? What does a stock’s P/E or price per earnings indicate? When is the best time to buy a stock? What does it mean to short sell a stock? What do the high and lows of the fifty-two week range indicate? Is it a good idea to diversify a portfolio? Stocks can be very complicated especially to someone who has never done anything with them. But, once you learn the terminology and understand the process stocks are not that difficult to understand. If you are new to stocks and the stock market then you need to be introduced to a few basic topics.

One of the basic topics that you need to know about stocks is buying stocks. When you buy stocks you need to first of all know what the company does. To start off it maybe a good idea to buy stocks from companies that you know about. For instance, if you really like Apple’s products and their service then you should look up the Apple stock. It is often helpful to look at internet sites to look up stocks and gather information about stocks. You should look at the P/E ratio or price per earnings. The price per earnings should be pretty low. You should also look at the fifty-two week range. If the price is at the lower end of the fifty-two week range then the stock may go up. Also, if is at the lower end of the range this means you probably aren’t overpaying for the stock. It is important not to judge a stock by it’s price. A high priced stock doesn’t mean it isn’t worth it and a lower priced stock doesn’t automatically mean it is a bargain. These are some basics that beginners should know about stocks.

Another thing that a beginner needs to know about stocks is that it is important to diversify your portfolio. It is not a good idea to have too much money in one stock because if that stock has trouble then your whole portfolio will be in trouble. It is not a good idea to have half your money in one industry like construction, technology or food stuffs. Basically, it is good to have variety in your portfolio. By the same principle, it is a good idea to not just have stocks, but to invest in other things like mutual funds. The bottom line is do not put all your money in one place. This is another important thing that a beginner needs to know about stocks.

These tips certainly won’t answer all your questions, but they are a good place to start. If want further advice then you should consult the internet or other free resources like investing magazines. But, if you really want serious assistance and advice then you could consult a stock broker or a financial specialist. If you put time into learning about stocks and the stock market then you will won’t be a beginner for long.

Chuck R Stewart discovered that through traditional means private placement is expensive and difficult to obtain. He also found that a IPO was one of the most efficient ways to raise money.

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