How do stocks get their value?
There are several articles out there that could describe to you all the reasons, but lets just focus on a few basics.
Stocks are valued based on the dividends that the company is expected to pay you. A dividend is a certain amount of money per share that the company gives you for owning their stock. The stock you own is a little I-O-U that the company gives out when it decides to raise capital through IPO or expanding its offering. There are many companies that don't currently offer dividends (Google being a prime example) So they are valued based on total market sentiment and the valuation of the company. One day they may offer dividends, but until then celebrate the companies growing bottom line.
Dividends should be a part of your portfolio, make sure to look into stocks that offer consistent dividends with increasing returns per year. This should be a pillar of a balanced portfolio.
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