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Things you should know before we begin...
When considering buying or selling stocks always remember...
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BUY LOW SELL HIGH |
Rule of 72
72 / % OF RETURN= NUMBER OF YEARS IT TAKES FOR YOUR MONEY TO DOUBLE
Risk
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If you risk high then you will either lose a lot or get a lot. If you risk low then you'll either lose some or win some. It can be hard to choose which is better but most professionals do a little of both. This is called diversification. "Don't put all your eggs in one basket." Like this common phrase says, don't invest all your stocks in one company. Spread your stocks around so that you won't loose everything in one company. That's what a smart investor would do.
Liquidity
Liquidity is how fast you can turn a stock into cash into your hand
Return
Return is the money you get to keep from stock after taxes.
hypescience.com
Volatility
If a stock chart is all over the place, then it's volatile. If it goes up continuously without much drop then it is stable.
BONDS
www.how-much.org
US Saving BondsThis is a very safe way to earn money. Remember, low risk=low return. You may not earn a ton of cash but it's super safe.
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ls.rts.edu
Corporate BondsCompany's do this if they are private and need money. It may be more risky but this means you could make more.
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seekingalpha.com
Municipal Bondsa security issued by or on behalf of a local authority= Google
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There is a data chart below that represents stock data. It may help you understand how stocks actually work and what they actually look like.
stock_data1.xlsx | |
File Size: | 48 kb |
File Type: | xlsx |
Split
A split is when the stock goes down like when Apple was selling a stock for $700. Then they split so you could buy 7 for $100. This is good because more people are likely to buy at a lower price. (BUY LOW SELL HIGH)