Stock Tips Info : What Goes Up Earns Bucks

When the price of a particular stock rises, that stock is said to be "up," meaning up in price. When the price falls, the stock is said to have gone "down." The terms "up" and "down" are also used to describe the rise and fall of the market as a whole.

As a company makes money, the value of its stock goes up. For instance, pretend you bought some shares of stock for $10 each. Since you share the company's profits, if it does well the shares might later be worth $15 each. You could then sell your stock and make $5 on each share. If the company loses money, however, you would also share its losses. Those $10 shares might each be worth $3 if the company fell on hard times.

Stock Tips Info : Those Funny Fractions

In April 2002, all stock exchanges in the U.S. began trading their stocks in dollars and cents.

For instance, the price of a particular stock might go up $1.10. This means that the price of a stock increased $1.10 over its previous price. If a share of stock had been worth $10, it would now be worth $11.10.

This is different from the earlier system, when stocks were traded in fractions based on 1/8th. If a stock worth $10 went up 1 and 5/8ths, it meant that the stock had risen $1 plus 5/8ths of a dollar in price, or a total of $1.62. In other words, if each share had been worth $10 previously, it would now be worth $11.62.

But why divide each dollar into eighths when it could simply be divided into hundredths—a hundred pennies, to be exact? It's because the U.S. dollar is a relatively new kind of currency. When the stock market opened at the end of the eighteenth century, prices were based on the Spanish dollar, which is divided into eighths.

Stock Tips Info : Of Bears and Bulls

Bears are cautious animals who don't like to move too fast. Bulls are bold animals who might charge right ahead. An investor is said to be "bearish" if he or she believes the stock market will go down. A "bearish" investor will buy stock cautiously. A "bullish" investor believes the market will go up. He or she will charge ahead and put more money into the market. An investor can be bearish or bullish about a particular kind of stock.

Likewise, the term "bear market" describes a time when stock prices have been falling on the whole. A "bull market" is a period when stock prices are generally rising.