FundRobot » Fund Price » can someone explain stocks?

Old   #1 (permalink)
Posts: 2,565
Default can someone explain stocks

as simple as you can please??

and also. I work at a company where we get stock. dnt know why or how, but i have a couple of shares. everybody does. Can I buy other employees stock shares?
Stocks4Me is offline   Reply With Quote
Old   #2 (permalink)
Posts: 2,586
Default can someone explain stocks

If you want more shares, first you need to go to a brokerage house, such as Scottrade or TD Ameritrade. They will have you fill out some papers and then you write them a check to deposit into your new account.
After that you can deposit more money by mail or transfer funds directly online from your bank.

Then you can ask the broker to buy shares of stock in your chosen company. You can do this at the time you set up your account or wait until you get home. When you are ready to buy, you can phone the broker or, most commonly, buy or sell shares directly on their web site.

The shares that you buy are kept on file at the brokerage. Many companies no longer issue certificates for shares but keep track electronically.

When or if your company issues a dividend, it goes directly to your account.
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Here is how stocks work:
Whoever owns the shares of stock, owns the company, no one else. When you buy a share of stock, you are one of the owners of that company. It could be any of over 13,000 companies that have stock such as McDonald’s, Coca-Cola,, Ford, Krogers, your local bakery or electric company.

As a company earns money, it becomes more valuable and this value is reflected in the price of its shares on the open market. You collect this increase in value when you sell your shares for more than you paid for them.

The company’s board of directors decides what to do with its net earnings.
?Some or all of the earnings may be re-invested in the company so it can grow, open new stores or make repairs. When this is done, the earnings money is used up but the company is more valuable by that same amount.
The per share price, having increased because of the earnings, retain that increase when the earnings are re-invested in the company.
?Some or all of the earnings may be given directly to the shareholders as dividends. They just mail you a check or send the money to your brokerage account. This makes the price of the stock decrease by the same amount as the dividend, so you have the same value in the total of stock and dividends.

Since you are an owner of the company, the members of the board of directors work for you. Each year there is an election and you can vote for the board positions, one vote for each share that you own.
If you don't think the present board members are running your company properly, vote them out. You can inform the board of your ideas, concerns or recommendations and these carry the weight of your shares.

You are also protected when you own stock. For instance, if your company gets sued and loses more than it can pay, the law cannot come to you the owner, and confiscate your house or other property. The shares may become worthless, but that is all you can lose.
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Gamer125 is offline   Reply With Quote
Old   #3 (permalink)
Posts: 2,526
Default can someone explain stocks

The clue is in the name! Stocks are shares. shares are a 'share' of a company. You and I could have our own business. You might own 1/2 the business and me the other half. We could say the company's value or net assets, example £100,000 were divided into 10 shares of £10,000 each. So I have 5 shares and you have 5 shares. Now the company may be worth more than it's asset value (possibly because the company can earn a lot more money by using its assets to generate revenue and thus profit.). So your 5 shares of £10,000 nominal value each might be worth £50,000 each. I say worth but obviously worth is what someone else would pay for them!
Whether you can buy other employees shares would be down to the original legal structure of the comapny and whether share transfers are allowed. They may be allowed but subject to board approval (ask HR or whoever). The company may be traded on the stock exchange, in which case you could buy shares there (you should tell your employees what you are doing, especially if you hold a senior position otherwise you might be insider trading)
TopGear.12 is offline   Reply With Quote


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