Dividends and Stock Market Terms
In reading newspapers such as the “Financial Times” and “The Wall Street Journal” there is always a table filled with information about stocks and shares. If one is going to make a living off the Stock Market it is wise to learn basic information about the companies you invest in. For example Mercedes Benz, have in the past five years made a rapid profit in the Stock Market. Mercedes Benz is one of the biggest car companies in the world, along with Audi and BMW, it also a solid performer on the Frankfurter Stock Exchange. The basic vocabulary needed for a Stock Market Portfolio can be considered under these words:
Company: Simply the share or stock that you invest, in such as Audi, Lufthansa or any other firm that is quoted on Stock Exchanges like NASDAQ, Toronto, Frankfurter and the London Stock Exchange.
Notes: Additional information on your investment or company. Notes can consist of Event or news of your company including brief information on what your company is and what it specializes in.
Price per Share: Simply the price one has to pay to obtain a single share of that company. It is common for people to buy one than more share in a company if you’re looking to become an investor.
Change Per day: This is the net increase or decrease a share makes based on the number of trades on a particular day. If more shares are offered to be sold then the price will go down. If a share is in demand then the price will go up. A price per share can either go up or down depending on news about a company. Companies that are well established are usually solid performers over the longer period. Coca Cola has a large market value, because they are able to advertise their product and convince people to drink it, all over the world. Additionally changes are also shown as a plus or minus percentage. For example Mercedes Benz could increase its share price by 15% merely due to their latest model of car becoming a success. This means that you would increase the money you invested by 15%.
Annualized Gain: In simple terms, annualized gain is the cumulative change over a period of one year. By this, I mean that Yahoo Portfolios will monitor a company’s daily change and sum this up into a column called Annualized Gain. In Yahoo Finance, Portfolios will automatically upgrade this column each week to enable an investor to see in total how much they have made or lost over the past year. If you obtain an annualized gain of 100% in a period of 7months it means that you have literally doubled your money. However this column can also help investors to make a decision to sell their shares if they believe that company may not perform so well in the future.
Market Capitalization: This describes the total worth of a company and how much it would cost to buy a 100% ownership. Companies with the highest market capitalization are considered the most valuable in the world. General Electric in the USA is an example of a company that has always had a high market capitalization
Holdings value: Holdings Value is the total amount of money that you currently have in your portfolio.
Dividends: Dividends are payments which companies make directly to their shareholders. They represent an investor’s share of the profit a company makes and which it decides to give back to its owners. Usually not all the profit a company makes is given back. Money is often held back for further investment in developing that company in the future, or to pay taxes. In the past, banks were always considered good dividend payers often they would return over 5% of the share price as a dividend. This is called the dividend Yield. Many people invest in shares not just to see their portfolio increase in value, but also to get back a steady income each year in the form of dividends.
A company should only normally pay a dividend when it makes a profit. It is also usual for a company to pay a dividend twice a year. The entire dividend is paid out half way through a financial year and the final dividend is made when a company knows what its profit for the year has been.
