Investing is not an easy task for the amateur investor. There is a multitude of information out there to learn about when investing. Thankfully, there are ways to simplify investing as well the terminology. When investing you want your investment to be as simple as possible. Most people try to be professionals when it comes to investing. Simplifying investing terms with stock should take first priority. It is safe to say if you do not understand something, do not invest because everyone else is. There are many stock terms to learn about such as volume, price per shares, market cap, history and etc.
Volume
When investing, volume refers to the amount of shares available at the time of investment. Many people confuse volume with market capitalization. When monitoring volume you should look at several factors such as how much volume of shares is available on a daily basis. If during the week there aren’t many shares available there is a possibility it is a hot stock. Volume is with a hot stock is usually seasonal which is a good sign for investing. Stocks which have volume tied up during a certain time of the year is guaranteed to make you money.
Price per share
Price per share is self explanatory. Example If company A issues out 100,000 shares and the price per share is $1 then the value of the total amount issued is $100,000. Price per share should be a focal point when looking at return on investment. Stock percentage is more important than the actual price of the stock. Example If company A stock price is $.01 a share and company B stock price is $10 a share company is a better investment. Why? Well company A has to reach $.02 a share for you to double your money, whereas company B has to reach $20 a share for you double your money. Company A is easier for you to double your money because it is a smaller hill to climb.
Market cap
The most important aspect of investing is monitoring the market cap. The market cap represents the amount of money you can make with a particular company at the present time. The market cap is should be looked at along with the history of the company. Example if company A at the present time market cap is $250,000 at $.01 per share but when you monitor the 5 year history the price per share reached $5 which means the market cap was $12.5 million at a point in time which makes your investment an attractive investment.
History
Prior to picking your stock you should monitor the history of your stock. Most people like to invest based on reputation of a company which is an amateur move in the investing world. Professionals know how to pick stocks based the consumer need. When monitoring the history of the stock make sure you pay attention to the season which the stock price spike and the time period. Example if your stock spikes during the winter time every year then it is a safe to assume it will spike in the up coming year. Also, you should pay attention to the time period in regards to a booming or recession economy.
There are many ways to simplify the language of investing. The simpler the better. Investing and predicting the market is hard enough. Good luck!