what is a stock? can you really make money from it? what is a good stock for a beginner?

Answer 1

Companies that sell shares of ownership on the stock exchanges are a subset of all the businesses you see around you, but they are often (not always) really big and prosperous companies. Still, not everyone is worth consideration from "a beginner".

As an example, Terra Nitrogen (stock symbol TNH) makes and sells agricultural and related chemicals. It it probably too pricey for someone new, it sells for around $120 per share in recent days. If you had bought it about this time last year, you would have paid something like $25-30 per share. Can a person make money from stocks, you bet.

Can they lose, definitely, consider if you bought TNH early this last July, paying around $140-ish. It dropped to about $90 within a month or month and a half. In that case, most people would panic and sell, losing money on the trade.

Here is a nice one to start with. Look up everything you can find on Cal Maine Foods (stock symbol CALM). It will cost somewhere around $22-23 per share to buy (plus your brokerage commission, at Scottrade it is $7 for the trade and you have a minimum of $500 to start an account). You used to want to buy a "block" of 100 shares, but not anymore, whatever number fits your interest and pocketbook.

Something else to consider. Why you want to do this. If you are dreaming of plunking down a little bit of money and have it magically balloon up and make you rich, such things are possible but not likely. That is the stuff of lottery tickets and wishful thinking. If you want to be a part of something, say you love Coke or Pepsi, then these are excellent publicly traded companies, buy some of their shares and essentially forget about them (they'll send you a reminder now and then, for these companies return a piece of the profits, called dividends). Maybe you see yourself chucking enough money at the gas pump, so you buy into ExxonMobile or ConocoPhillips perhaps (if you buy Citgo gasoline, the profits go to Venezuela, their national oil company owns Citgo). Last year, as I recall, Exxon earned a whopping $39 billion dollars in profit, and they paid out $9 billion in dividends.

Stocks can be like chasing chickens in a coup, looking for a fat one for tonight's dinner. Or it can be like planting a tree, one that in a year or two you will eat fruit from it. Beginners in stocks need to decide the what and why of it and start slow and easy. Another, slow and easy, way to buy stocks is check out sharebuilder.com, where you can put a little in each month, or some schedule appropriate for you. When the stock is down, your monthly contribution buys more shares. When the stock is up, it buys fewer, but in the long run, the average generally is good. In the long run, good companies go up in value (your share of their profits, commonly called earnings per share), so it often (but not always) is earning you more than money in the bank. This brings me to one final thing. Buying and selling willy-nilly is not good. Leaving your money in the bank to earn interest will be better for you in the long run--so don't forget keeping a really good and full savings account. The bank book will be a reality check on your stock market explorations. Good luck.

Answer 2

A common stock is a partial ownership share in a company. Ownership of a stock allows the owner to share in the profits of the company--maybe. Yes, you can make money from a stock. You can also loose money. For a beginner, a good stock is actually a mutual fund which is the partial ownership of a holding of a portfolio of stocks. Here is a link to a good mutual fund company. T Rowe Price.

http://www.troweprice.com/common/indexFundFacts/0,0,ticker=PRWCX,00.html?src=Mflanding&scn=select_a_no_load_mutual_fund&ddown=Select_Fund_by_Name&origins=prospect

Answer 3

Of course your can buy one share of Google! You can even buy fractions of shares of certain stocks. Don't listen to people who don't know what they're talking about. You can open up a trading account, which is essentially like an online bank account. Simply look one up on the internet (i.e. Scottrade or E*Trade), download the forms, mail them with a check and sign in with your password. Type in the "buy" square, GOOG (which is the symbol for Google) and enter number of shares as "1". Within half a second you will have bought one share of Google. When their stock price goes up, your account goes up in value. GOOG went up 10% last month. It's easy, and with a good deal of study, will help you grow your savings bigger than you could ever do on your own. Good luck!

Answer 4

If you do not even know what a stock is then you certainly do not need to even think about buying anything. Read Jim Cramer's Mad Money and watch him on CNBC at 6 eastern m-f before you even consider buying anything.

Answer 5

Stick with blue chips that will be around seemingly forever, such as IBM, AT&T, Verizon, Altria, Exxon, most of which also pay a good dividend whil you wait for capital appreciation.

Answer 6

It's like the deed for your house or the title for your car but for a company.

If you have a stock then YOU OWN THE COMPANY.

Only if your company is making money.

Exxon Mobil.