How to Read Stocks and Actually Understand Them

When you’re first learning about the stock market, the stock tables in the paper can be quite confusing. Learning how to read stocks won’t take much time, though, and it’s very important.

To begin, you’ll notice that there are about twelve columns across the table, and each stock has its own line. The first two columns (usually labeled something like “52W High” and “52W Low”) are dealing with the stock’s performance over the past year. “52W High” shows the highest point the stock has reached in the past 52 weeks, and “52W Low” shows the lowest.

In the following column you’ll see the actual name of the stock. This will be followed by another column that shows the stock’s ticker symbol. There’s a unique combination of letters for each stock. In fact, you might be able to recognize some of them. Maybe you’ve seen the tickers running across the bottom of the screen when you watch the news.

Speaking of TV, you might want to watch the financial shows. They can give you a lot of help and information that will show you how to read stocks and understand the stock market even better.

There’s another column next to the ticker column, and it’s labeled “Div.” This column shows you the annual dividend the stock pays out for each share. If you see a blank space in this column, that means the stock doesn’t pay dividends right now. The same rule also applies to the very next column, “Yield %”, the percentage return on the dividend.

P/E is the price to earnings ratio. Dividing the current stock price by earnings per share for the last four quarters gives you this number.

“High” and “Low” are the next two columns. You’ll be able to see the lowest and highest point the stock has reached in the day’s trading. “Net Change” shows the change from the day before; “Close” tells you the point when the stock closed for the day.

You’ll be able to move on and learn even more about the stock market once you have a basic understanding of how to read stocks.

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