Does owning a piece of a company sound attractive to you? Perhaps the stock market is the place for you. Before you go take your life’s savings and buy a lot of stock, there is some important information that you need to know about investing in the market. You can find that information here.

Before leaping in, watch the market closely. Before your initial investment, try studying the market as long as you can. It is not uncommon for successful investors to have spent years watching the market before they actually invested their own money. Spend some time as a stock watcher. This will give you a good idea of how the market is working and increase your chances of making wise investments.

Stocks are not merely certificates that are bought and sold. Once you own a stock, you now have partial ownership of whatever company is behind that investment. This means you are entitled to both claims and earnings. Sometimes, stocks even come with the chance to vote on issues affecting the company that you are invested in.

Remember that if you hold common stock, as a shareholder you have a right to vote. Dependent on the company’s charter, you might have the right to vote on certain proposals or to elect directors. Voting can be done at the yearly shareholders’ meeting or by proxy voting through the mail.

Living Expenses

For rainy days, it is smart to have six months of living expenses tucked away in a high interest investment account. This way if you are suddenly faced with unemployment, or high medical costs you will be able to continue to pay for your rent/mortgage and other living expenses in the short term while matters are resolved.

Try to view every stock you purchase as owning a portion of a company, instead of just a meaningless card to be traded. Know the company’s financial statements backward and forward, and understand their strengths and weaknesses. This gives you the ability to really consider your options when it comes to investing.

Try to purchase stocks that will do better than average. Average is typically defined as 10% annually. Estimating your stock’s likely return is as simple as locating the growth rate’s projected earnings and then adding that to the dividend yield. For a yield of 2 percent and with 12 percent earnings growth, you are likely to have a 14 percent return.

Now that you’ve come to the end of this article, are you still interested in investing in the market? If it has motivated you, it’s time to jump right in. When you take the time to fully embrace this information, stock buying and selling can become almost second nature.

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