How to Make Money on the Current Stock Market

Share Price:
The first way to make money on the stock market is an increase in share-price value. You purchase a stock at $10.00 per share and over the next fifteen years the price grows to $25.00 per share so the value of your holdings for this company have increased by $15.00 per share…minus any taxes of course. Sometimes stock prices get high and they split and then you own more shards. For example, you stock reaches $50.00 per share and then splits…so it is worth $25.00 per share again…only you have 100 shares instead of the original 50 you owned.

Dividends:
Dividends are income paid out on stocks owned…usually quarterly.

Long term growth:
Are you willing or able to hold onto your shares in the long term? Right now, actually a few months ago would have been better…stocks were at outlet prices…if you did your research and were ready to ride out the inevitable storms and volatility. You win. Don’t be too concerned with the day to day ups and downs…ride it out with the future in mind.

The company itself:
Check out how much the company is worth. Not what they say it is worth but how much it would cost if you purchased all of the stock…the company’s market cap. This is an important distinction. On paper General Motors was worth a lot more than say e-bay…but if you owned e-bay stock.

Companies to look for:
Those researching alternative energy. Research public companies, or ones about to go public, that are producing or researching alternative energy. Environmentally friendly companies that are profitable. Companies that sell high quality goods at low prices – think Wal-mart. Companies that manufacture staples or candy: Things you always need and are recession proof. We’ve owned Wal-Mart and Tootsie for years and I wouldn’t sell them. They are great performers.