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Posted by: Jim L on 2010-01-27, 04:20:13
An index is a group of stocks chosen to represent the market as a whole. The Dow Jones Industrial Index is made up of 30 stocks in various industries. Indexes are just an easy way to track the overall market or various parts of the market. Percentage increase is how much the stock has increased. So if a $20 stock goes up to $21, that is a 5% increase. A decrease percentage is the same in reverse. You may also see percentages used in terms of dividend yield. A company with a 2% yield means that its dividend equals 2% of the stock price over the year. Many but not all companies pay a quarterly dividend, a few pay an annual dividend only, and many pay no dividend at all. Stock brokers are companies that have a seat on the various exchanges so they are the investor's gateway to trading stocks. "Discount brokers " operate mostly online and are self-service - investors make their own trading decisions and pay a lower fee, maybe $7 for a buy or sell transaction. "Full service " brokers give advice (not always good or trustworthy advice by the way) and you pay a higher fee per trade. Investing in stocks is a complex endeavor and there are many differing opinions about how to invest. Also your investment strategy should be based on your tolerance for risk. There are risky stocks that offer the possibility of great returns and there are safer stocks that pay high dividends but won't go up much in price. I suggest you pick up a beginning stock market book and read it for more details on investing strategies. |
