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Step 1
Look for the number of shares that were traded the previous day by looking for a heading called "sales." If a large number of shares were traded, it will give you some indication as to the popularity of the stock among investors. If only a few shares were traded, then the stock doesn't have much following. Also, stock that seldom trades tends to fluctuate more in price when some are sold.
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Step 2
See whether a stock is going up or down by looking at its high and low prices over the past year. Also, that information will tell you something about that stock's volatility, particularly if there is a wide difference in trading value over the past year. Head now to the right of the chart to find out how well the stock did during the previous trading day. You will see its low, high and closing prices, as well as a comparison with how well the stock did the day before.
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Step 3
Pay close attention to the size of the annual dividend that a company ordinarily pays to its stockholders because, in addition to increasing in share price, that will tell you how much you will receive for your investment. Then you should look for a heading called "P/E" which stands for price/earnings ratio. As its name implies, it is the relationship of the stock's closing price and the amount that the company made during the latest year that it reported. A stock with a high P/E tends to be popular with investors who are willing to pay a premium because of its prospects.
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Step 4
Go to a cable station that is devoted to financial news like MSNBC or CNN for even more information. At the bottom of the screen is a ticker tape that provides you with much needed information about individual stocks. You can learn how to read it from the eHow article, "How to Read the Stats of the Stock Market."
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Step 5
Go online to one of the numerous websites that can provide you with more information than you'll ever absorb, but they can be helpful to you as you make a selection of investments (see Resources).
