What Drake says (in his song, Trophies)
“My stock been going up like a crescendo.”
What we can learn from Drake:
People buy stocks (or invest in stock) as a way to earn money. The idea is to buy a stock at a low price, and sell it at a high price. Whatever you make as the difference is your return. No one wants to lose money, ever. So, if your stock, like Drake’s, is going up…it’s a good sign you’re about to be in the money.
What we can learn about stocks:
- A stock signifies you own a piece of the company. Dividend-paying stocks divide up a company’s earnings across all investors for even better returns.
- The basic mantra of investing in stocks (and the stock market) buy low and sell high. What dictates the price of a stock on any given day is supply and demand. If more people want to buy the stock, the price goes up. If some bad press about the company gets in the news, many investors may want to sell their shares.
If Apple announces their latest innovation, many people may want more of that stock.
The Financial Lessons:
- For example: In January you buy 10 shares of Apple for $10.00 each. By December your shares are worth $15.00. You can sell for a profit of $50.00, or hold on to the stock in the hopes the price will increase further and you can make more money.
- Stocks have historically averaged an 8-10% return for the last 100 years. Compared to interest offered on a savings account, buying stocks is a great way to make a bigger return on your money than simply putting it into a savings account. It does, however, come with more risk and the potential for financial losses.
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