How to Read Stocks & Bonds

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Reading about stocks and bonds is like reading complicated chemical formulas if you don't know how to speak the special language of investments.

Look for the Dow Jones Industrial Average. You are likely to find something that looks like this: DJIA 8,000.86 down 148.15 (-1.82%). If you were to read this to someone, you might say: "The Dow Jones Industrial Average closed trading today at 8000.86, down 148.15 points, or 1.82 percent from its close yesterday." Other Index quotes you might see listed: S&P (referring to the Standard & Poors 500 Index), and NASD (referring to the National Association of Securities Dealers Index).

Look for the XOM stock symbol in the newspaper, or key that symbol into the website query box. You will see something like this: XOM open 78.25 previous close 77 bid 78.50 ask 78.75 last 78.75 hi 79 low 76.89 vol 51,857,626. This information would be read as follows: "Exxon Mobile opened trading today at $78.25 per share. It closed yesterday at $77. Its bid price is $78.50, and it is offered at $78.75. Its most recent trade today was at $78.75. It traded as high today as $79.00 and as low as $76.89, and 51,857,626 shares traded today."

Look for a separate section of Treasury bond quotes. A representative quote would look like this: T-Note 4% of 3-15-2010 at 100.17 YTM 3.927% CY 3.993%. You would read it as: "The 4 percent coupon Treasury notes maturing on March 15, 2010, last traded at par 17 for a yield to maturity of 3.927 percent and a current yield of 3.993 percent."

Find the section of quotes on corporate bonds. One issue could be: Home Depot 5.40% of 3-1-2016 at 96.97 YTM 5.859% CY 5.569% BBB. This would be read: "Home Depot five forties maturing March 1, 2016, last traded at $969.70 per bond, which gives a yield to maturity of 5.859 percent and a current yield of 5.569. They are rated triple B." When speaking about a bond coupon rate, it is proper to read 5.75% as five and three quarters or as five point seven five percent.

Finish checking quotes by looking for the municipal bond section. There, you might find this quote: Minn St 911 Rev Bds 5.00% of 6-1-2014 at 112.41 YTM 2.95% CY 4.448 AAA Non-Call. This quote would be read: "Minnesota State five percent 911 (emergency services) revenue bonds maturing on June 1, 2014, last traded at one twelve forty one (which means $1124.10 per bond) for a yield to maturity of two ninety five and a current yield of 4.448 percent. They are rated triple A and are not callable prior to maturity."

You may see GO bonds, which stands for General Obligation Bonds--the highest rated municipal bonds because they carry the full faith and credit of the state that issued them.

Tips & Warnings

  • Stocks are usually identified by their trading symbols, or call letters. For example, American Telephone's trading symbol is ATT. Corporate bonds may be identified by the issuing company's trading symbol or by its corporate name. Municipal bonds are identified by the name of the state or municipality; they sometimes include the name of a construction project or use, such as education funding. Usually these names are heavily abbreviated, so you might have to ask what the abbreviations mean. Never feel shy about asking questions about investment terms. The professionals who work with investments should be happy to teach you without making you feel uncomfortable or foolish. After all, it is your money you are planning to invest. If you feel intimidated in any way, you should find someone else to work with who has a more professional attitude. Always be wary of people who attempt to make you feel ignorant.

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