How to Read Stocks and Actually Understand Them
When you’re first learning about the stock market, the stock tables in the paper can be quite confusing. Learning how to read stocks won’t take much time, though, and it’s very important.
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.
The next column is the name of the stock itself, followed by another column showing the stock’s ticker symbol. Every stock is given a unique combination of letters. Perhaps you’ll even recognize a few (or more than a few) of these tickers. They periodically run across the bottom of the screen of cable news networks.
Speaking of which, watching the financial shows on these networks will give you further help on how to read stocks and other aspects of the stock market.
There’s another column next to the ticker column, and it’s labeled “Div.” This column shows you the annual dividend the stock pays out for each share. If you see a blank space in this column, that means the stock doesn’t pay dividends right now. The same rule also applies to the very next column, “Yield %”, the percentage return on the dividend.
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.
After that you will discover the columns of “High” and “Low.” These are the highest and lowest points that the stock reached in the day’s trading. “Net Change” refers to how much the stock price has changed from the previous day, and “Close” lets you know what the final price was when the stock market closed for the day.
You’ll be able to move on and learn even more about the stock market once you have a basic understanding of how to read stocks.
