DEFINITION OF THE DAY
Stock: A part ownership of a company.
Hearing us talk a lot about stocks? Ready to get a piece of the action? There are about a million ways to make money on the stock market, but the most basic is buying a stock. This means you own the tiniest little slice of a company, and you might make money in a couple of ways:
Dividends: Dividends are cash a company sends you because they want you and everyone else to be excited about buying their stock. Many companies pay these out four times a year, but that can vary. The amount of the dividend also varies depending on the company's profits for the year. Final note: not all stocks offer dividends.
Price appreciation: Price appreciation is when the stock goes up in value. Just like buying a house, if the price increases while you own the stock you can sell it for a profit and make money off the sale.
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. Even if one stock in your portfolio or the index fund loses value, it's likely that others will gain value or maintain a steady price. This makes you less likely to lose money in the long run.
GET BETTER AT IT:
*This section is not sponsored by any third parties. These are our pure, honest opinions of what we think is easy and works best!*
Want to start investing, but not sure how to jump in? Acorns is a nifty tool for getting started. Basically, every time you buy something with a card, Acorns rounds up your purchase to an even amount and invests the difference. If your cockatiel feed costs $8.50 Acorns rounds the charge up to $9.00 and invests that $0.50. It only costs $1 per month, and you'll invest all month without even realizing it.