There are two ways to make money with stocks:
- Dividends: Dividends are financial rewards you get for owning certain stocks. Companies usually pay out dividends four times a year. A dividend is equal to a percentage of a company's profits. However, not all stocks have dividends.
- Price appreciation. Price appreciation is when the stock goes up in value. For example, if you buy a stock for $100 today and a year later it's worth $200, that price appreciated. Good job! You earned $100 on your investment.
Remember, one big rule with investing is to have a diverse portfolio. This means you shouldn't just buy stock from one company. It's better to buy a range of stocks or invest in an index fund. These are collections of stocks from different companies. That way if one stock in your portfolio or the index fund loses value, it's likely that others will gain value, limiting your losses and increasing your chances of making money in the long run.