How do stocks work and how do you make a profit off of it??
In: Economics
Shares of stock are tiny fractions of ownership in a company. The two main ways to make money are “buy low, sell high” and dividends. The first means that you buy shares, hope they increase in value and then sell them. So you buy shares of Apple at $50 and when it’s increased to $150 you decide to sell and buy Tesla shares. Dividends are quarterly payments from company profits that some companies make. They are typically about 1-3% of share price but not all companies pay them, choosing to reinvest profits into growing the business. There are also companies who pay out larger dividends because they are stable, slower growth companies (like utilities).
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