How to Read Stocks

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When reading stocks, remember that the closing price is the price at which the stock was last traded, and the price earnings ratio is the price divided by the earnings. Discover how to read dividends when looking at stocks with help from a portfolio manager in this free video on personal finance and money management.

Part of the Video Series: Stocks & Bonds
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Video Transcript

Okay, so you're wondering how to read a stock. Presumably, you're looking at a stock quote, and you're looking at all the different bits of information that are that are floating around that num numbers, and wondering what they mean. The most basic ones are, if you were to look in the evening, the closing price of the stock, and that'll be the price at which the stock last traded. Unless there is trading done after hours that's the price of the that the stock will be at the opening of trading the next day. There's also things such as the price earnings ratio you should be aware of, and the price earnings ratio; ideally around thir twelve to fifteen is a really good number. And really, that's the price divided by the earnings, and you want that those earnings to be as high as possible, so you can you can work out the numbers on that. The other thing to look at is the dividend. Is there a dividend? And you'll see both the amount of dividend that is paid out in either cents or dollars, and you're also going to see the yield percentage, and that's an important thing to look at. And there are a whole huge number of things, really, to look at when you're reading a stock. So, best thing to do is to use your favorite research tool, either online or go talk with someone about it. But, look at each and every one of the things that you will see on a quote, and when you understand those you will understand the stock.

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