Stock Profit???

Question

So if you buy a stock at 98 and sell at 105 thats only a 7 dollar profit, so why would you even want to invest in stocks if you're only going to gain so little? I don't think i understand stock profit so please help! Thanks ALOT!!!

Answer 1

Ok... 7 dollars gain on a stock is not much, it's only 7%, you can get 5% a year from a bank at most, but you could do this many times a month or a year and end up making 20-50% a year, wich is a decent profit for a couple of hours work a week. this is much better than your money stuck in a savings account. the stock market is the perfect business, and I just recently started making a living full time out of it... good luck

Answer 2

The simplest explanation is that over the longer term stocks can go up considerably more than that. For example in July 2002 you could have purchased a share of Apple computer stock for $8/shr. Yesterday Apple closed at $132/shr. If you'd spent $800 for 100 shares of Apple (and most investors buy more than 1 share of a company) your investment would now be worth $13,200.

Apple has had an extremely successful half decade, but even the stock market as a whole has gone up about 50% since 2003. Over the past century the market went from 43 to 12,000.

Even the example you mention is a pretty good 7% return-- if the stock went up that much in a year it'd be a much better investment than a savings account.

Answer 3

What you are missing is the number of shares.
Each share of the company stock you buy is $98. If you buy
100 shares, the total price will be $9800. Now when you sell the stock at $105, you will be selling 100 shares and you will be getting $10,500. Your profit, excluding transaction fees, would be $10500 - $9800 or $700. I use TD-Ameritrade to buy and sell stocks. The transaction fee for each buy and sell is about $10. The net profit including transactions fees for your example would be $680.

Answer 4

That's a 7% profit. Not too many banks pay that. Maybe you could read a book on stock investments.

Answer 5

this is true and i have the same thoughts!
you can however get a stock at around the same price that gains $10 wich is around 10% and if your investing $10,000 then that turns into a $1,000 profit!
you will find stocks that are cheaper especialy under $10 will make bigger gains and profit!
check out http://goldenbullpicks.com

Answer 6

The profit would be $7 for each share that you own.

So if you own a 100 shares, you make a profit of $700.

Answer 7

well, if you bought last week and sell only 7 days later, your profit rate before costs is 7 dollars times 52 weeks a year divided by 98 dollars cost, or 371% annually.

at 371% annual rate of profit, if you can find more of these deals, you'll quickly become wealthy.


oh

Answer 8

How much so you think you will make by putting it in the bank? If I have 1000 shares that 7 dollars equals $7000. How many years will it take you to make that in a bank or thru CD's. This 7000 dollars could have been made in a weeks time.

Answer 9

Its about leveraging your Money. You'd have to buy a lot more than one share to make it worth your while.

Your logic is as follows: The Rolling Stones have a world tour concert. It costs them 500 million to produce the tour. The Stones only make $35,000,000 in 6 months. Who would want to do that?

The more shares you own, the more money you would make.

Answer 10

Got your calculator?
I buy 100 shares of PCU in Dec 06 for $ 5160. ( $ 51.60 per share)
I sell on Apr 16 for $80.03 per share...I now have $ 8000. to buy 218 shares of Medimune ( at $ 36.70 )
On Apr 23, I sell those 218 shares for $56.57 each...$ 12,332.
Same day I buy 306 shares of WNR ( Western refining) for $ 40.30..( $12332. worth )
If I sell Monday morning it's worth $ 19173.96
$ 14000. and change since Christmas....
... so the lesson is..you're not buying one share..you're not holding forever..and you're constantly reading and looking for info ...PCU: feeding China the metal it needs to build....Medimune:most likely of three companies strongly eyed for takeover ....Western refining...refining boom starts in Mar or Feb ( most years) and builds 'til mid- summer.
Info available to everybody... and there's more than one way to do things...remember that 100 shares of PCU ? Even if I didn't make the trades, they would be worth $ 10,193.00..
( more than doubled the money in 7 months.)
That is a little example of " stock profit" and " why you would want to invest..."
Hope it helps.