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Step 1
Understand the compacted information contained on the ticker tape that runs at the bottom of the screen on a business show. It contains five pieces of information. The first is the ticker symbol of the company. For instance, Microsoft Corp is MSFT. The second is the number of shares that made up the last trade. The third piece of information is the price of that trade, and the fourth is an arrow pointing up or down, which shows whether the trade was lower or higher than the close on the previous day. Finally, the fifth figure is the actual difference between the trade and the price at the close of the previous day.
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Step 2
Turn to the business section of your daily newspaper any Tuesday through Saturday and chances are that you will see stocks that are listed on the major exchanges, New York Stock Exchange, American Stock Exchange and NASDAQ. Find the symbol for the stock in which you have an interest. See how the stock has traded for the past year, then see the stock's trading range as well as how it compares to its close the previous day. Then look at sales as well as the dividend paid by the company. Go to the right and look for P/E, the so-called "Price/earnings" ratio. It reflects the relationship between its close yesterday and its most recently reported annual earnings.
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Step 3
Go to "Yahoo! Finance" (See Resources) on the Internet if you want to see even more information about a particular stock. Besides what you will see either in the newspaper or on television, that website and others like it will tell you such things as the time of the last trade, the amount buyers and sellers are willing to trade the stock, called "bid and asking price", and a plethora of information about that stock, such as historical prices, ownership of the stock by executives and estimates of upcoming earnings by financial analysts.
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Step 4
Get a feel for a particular stock by either following it online, in your newspaper or on television, but do not make an investment without seeing the company's annual report. After you are satisfied with all of the information, make your purchase, but always be mindful that a great stock today can turn bad almost overnight.
