How to Read Stocks and Understand What They Mean

When you're first learning about the stock market, the stock tables in the paper can be quite confusing. It's important to learn how to read stocks, though, and it won't take a lot of time.

To begin, you'll notice that there are about twelve columns across the table, and each stock has its own line. To find out how the stock has been performing over the past year, look at the first two columns– these will be labeled something to the effect of "52W High" and "52W Low." You'll see the highest point the stock has achieved in the last 52 weeks in the "52W High" column. Its lowest value will be in the "52W Low" column.

The next column is the name of the stock itself, followed by another column showing the stock's ticker symbol. Each stock has a unique combination of letters. You will probably recognize some of these from the tickers that run across the bottom of the screen sometimes on the cable news networks.

Speaking of which, watching the financial shows on these networks will give you further help on how to read stocks and other aspects of the stock market.

"Div" is the column that comes after the ticker column. This indicates the stock's annual dividend paid out per share. Many rows will have this column blank, which means they don't currently pay out dividends. The same goes for the next column - "Yield %" - the percentage return on the dividend.

P/E is the price to earnings ratio. Dividing the current stock price by earnings per share for the last four quarters gives you this number.

"High" and "Low" are the next two columns. These are the highest and lowest points that the stock reached in the day's trading. "Net Change" shows the change from the day before; "Close" tells you the point when the stock closed for the day.

With a basic understanding of how to read stocks, you can now move on and start learning more about the market itself.

Visit How to Buy Stocks and get all the free help you need in discovering How to Trade Stocks, Online Stock Brokers and so much more!

- Carlie Evie