Before understanding dividends, we need to talk a little bit about earnings. A company’s earnings is basically the final profit it has left over after all expenses are paid. There are many things the company can choose to do with this profit.
Our jobs and savings are highly impacted by the health of the economy. Understand how changes in the economy will impact you and how cycles in an economy work, you are empowered. You become more prepared, less fearful, and less impulsive during downturns.
Before you can attempt to understand the stock market, it’s important to first understand the building blocks behind it: companies. You must also understand how the stock market helps you profit from companies.
Governments spend money on different areas, all of which help provide necessary services to citizens. As you can probably imagine, these activities are costly. Raising money to ensure they are consistently managed is no easy feat. Say hello to bonds.
Where do you go to buy avocados? The supermarket. Where do you go to buy electronics? Amazon.ae or the local electronics store. Investing in stocks is no different; it is essentially a transaction involving a buyer and a seller in a market.
Walk into bank or open up the business section of any online news website, and you’ll quickly get bombarded and confused by what appears to be an endless number of complicated investment options. Finance people work hard to make you believe this false reality.
As we discussed in our myth busting post, there is a huge difference between risk and volatility. Risk measures the likelihood of an investment’s failure. Volatility measures the severity of ups and downs you experience throughout an investment.