Money Sense Tips

Anyone can buy stocks. All you have to do is talk to an investment professional, and you can be a stockholder in short order. But those who have never invested in the stock market may be hesitant to do so.

One of the biggest reasons people are unwilling to invest in stocks is because they simply don’t understand them. After all, the ability to buy a certificate and be entitled to a portion of the issuing company’s profits does sound a little too good to be true. But there is plenty of logic behind the concept.

Shares are, quite simply, pieces of ownership in a company. It’s up to the company how the initial shares are distributed. They may be sold to a select group in an effort to maintain as much control as possible over the company. Or they may be sold on the stock market, making it possible for anyone to buy them.

But why would a business want to sell off pieces of its ownership? In most cases, it is done to raise capital quickly. When a business needs to obtain assets, it is usually faced with a choice of saving the money to get them, borrowing money, or selling stock. Borrowing requires repayment of principal plus interest. Saving the money needed may take a long time. Selling shares is quick, and there is no need to repay the money received.

The issuing of shares also offers other benefits for the company. It provides an avenue for founders to cash in on their investments and move on to other ones. It provides a way for the company to gain notoriety. And some companies issue shares as a way of providing incentives for employees.

Some businesses sell off all ownership in shares, but many retain some of the stock to keep some control of the company. They may issue only part of their stock in their initial public offering (IPO), then issue more shares at a later date. This gives them a means of gaining additional capital when it is needed. They could also issue new shares, but this dilutes the value of both new and existing ones.

There are also plenty of benefits for shareholders. Holders of common stock receive voting rights at shareholders meetings, allowing them to have a say in how the company is run. Stockholders are also entitled to dividends in consideration for their investment. Dividend amounts are determined by how much profit the company makes, and they are divided equally among shares.

The issuing of shares is a win-win situation for the company and its future shareholders. The company gets the capital it needs to grow, and shareholders get the opportunity to reap a portion of the profits.

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The “The Neatest Little Guide to Stock Market Investing” was written by Jason Kelly, the author of the popular “The Neatest Little Guide” series.

His latest edition of “The Neatest Little Guide To Stock Market Investing” offers the reader an essential resource book on stock market investment. The book covers topics like why stocks are good investments, how you make money owning stock, why and how a company sells stocks, how you choose a good broker to buy stocks, how you evaluate stocks, and much more. In fact, I learned more in the week I spent reading this book, than in 6 months of listening to tips from co-workers, on-line discussions, and self-directed research.

The book also features the Kelly’s Maximum Midcap Strategy, which is a successful investment program, real-life scenarios of successful investments, insider knowledge from highly successful investors like Peter Lynch, Warren Buffet and Bill Miller, analysis and comparison of their chosen methods, well-resourced and recommended internet investment sites, newsletters and books, and summaries of all the key points.

In each of the 7 chapters, he covers every area that a serious stock investor should be familar with.

In chapter 1, he defines all the terminology you’ll encounter in stocks. In a very readable manner, he quickly covers EPS, P/E, PSR, ROE, Beta, and numerous other concepts that are useful.

In chapter 2, he describes the methods of 6 all-time top investors (including: Buffett, Lynch, O’Neil, etc.) comparing and contrasting there methods.

In chapter 3, he explores what some historic evaluations of stock growth show. This is great stuff, especially during a down market.

In chapter 4, he explains in detail the Dow Dividend Strategy. Anyone can understand this and with only 30 minutes of work per year have a relatively successful investment plan.

In chapter 5, he covers the process of choosing a broker and placing orders.

In chapter 6, he covers some of the many methods you can use to research stocks. With a ton of web-sites, newsletters, and books, Kelly’s advice can save you countless hours wasting time looking for information from the wrong source.

In chapter 7, he explains his own strategy. With easy to understand worksheets and using the knowledge gained earlier in the book, he guides you into an investment plan that will suit you.

This book is for anybody interested in stock market investing. It touches on every topic a beginner investor should know before embarking on an investment career. It is informative, light-hearted, enjoyable to read and written in an easy-to-understand language. Even if you have a broker that you like, you owe it to yourself to educate yourself with this book.

My advice: If you are serious investing in stock marketing, get this book – “The Neatest Little Guide to Stock Market Investing” today!