Simviation Forums

Well, I think I'm going to invest some money in the stock market into a company I trust, but I have a question first.

How does stock change?

the first thing to think about, how much are you willing to invest. In a stable company and starting out, the more the better or else you just wont make much if any profit when selling.

$1200 (US), I may add more if the company goes up higher than I expect.

I know 1200 is not alot but it is all I want to "risk" at the time.

its a fair amount. If you know someone who is in the stock market personally talk to them. $500 would be a good starting point to be honest, so $1200 should get you a reasonable amount. I was looking at it in the past, but then when my ex and her family lost a load of money in the Enron crap i decided against it.

Don't do it alone.  Once you've been in the game a while, you'll build some knowledge.  Until then, find yourself a GOOD financial planner and explain to them what you want to achieve and how you're willing to help them get you there.

The stock I want to buy is currently $66.45 a share, so say it goes up .12 today, does that mean that for every share I bought I made $ .12 on it?

If so how do people make millions off of it?  Let alone pay for food?

Stocks are high risk, I recomend Mutual funds

To give you a idea I own 38 shares of stock in Dow Chemical Co. (I know not a lot) but I have had it since 1968, 4 times a year I get a intrest check in the whopping amount of $6.39!

Hardly enough to fill up the car let alone anything else! LOL!!

If so how do people make millions off of it?

they buy in as part of an investment group. that way you have proper interest in the company and are elligable for company profit from the shares. Share owners make money from the company itself not selling there shares. Thats the whole point, you are buying a part of the company and therefore entitled to part of the profits. The more your own the more your entitled to. The idea is you keep the shares as long as possible.
For instance PI has his 38 shares which gets him $6.39 in profit. if he had 3000 shares he would get about $505 in profit.
When it comes time to sell the shares you make the money off of those but its not how you make the milions

The stock I want to buy is currently $66.45 a share, so say it goes up .12 today, does that mean that for every share I bought I made $ .12 on it?

In that scenario, you'd make $.12 on every share you own...WHEN you sell it.

Say you bought 100 shares at $66.45.  This would mean an investment of $6645 initially.  If it went up $.12, it would now be worth $6657 (an increase of $12).

However, if you don't sell it, you're not going to get much benefit from it.  (Sure there are yields, and all that, but I'm trying to keep it simple.)

So now you're up twelve bucks.  You can sell it at a profit of $12 for yourself, or you can hold onto it in the chances of it going up a little more.  Or you could watch it drop to $.05 a share, which means you'd have lost any money you've spent on it.  (Hence the risk.)

As for how people get rich individually, it's not impossible.  You've got to REALLY know the guts of business.  You've got to be able to spot trends, and predict what is going to be huge in the future.

Say for example you'd bought Microsoft when it was only $1 a share (to use completely random numbers - I doubt MS was EVER so cheap, even as an IPO).

You spend $1,000 and get yourself 1,000 shares of MS.  Currently, MS shares are trading at $25.07.  That means you'd have turned your investment of $1,000 into $25,070.

Do some research.  Read the reports and predictions.  Find out a little about the "predictor" you're reading.  See how accurate they've been, etc.  

The more you know, the better luck you'll have.

Ok, thanks for the replies, but I have one more question, I think.

What is the dividend, I heard that this is were you can make some money even if stocks are down.

Also I did read a little interesting paper on the NYSE and found out some neat facts.

I could never even begin to break down dividends, yields, etc...into simpler terms.  (I'm horrible at that part of life.)

Maybe someone else can simplify it, but if I start to explain it, you'll leave even more confused.  LOL