Even as a new graduate you might think that the corporate world is not for you. Big business? Wall Street? All those suits, briefcases and people walking around holding huge coffees the size of a paddleboard. Pah!
But you are surrounded by companies every day of your life. Take a look around you.
Business is Everywhere
Perhaps you’re reading this article on an Apple (AAPL) iPhone or Microsoft (MSFT) computer. When you’re finished you might log on to Facebook, owned by Meta Platforms (META) or download some tunes from Spotify (SPOT).
Why not order some food from DoorDash (DASH) or pop down to Walmart (WMT) for some groceries? Then it could be a night in watching Netflix (NFLX) or heading to the gym or court wearing your new Nike sneakers (NKE).
Your relationship with your favorite company doesn’t just have to be using their products or services or marvelling at the genius behind the designs. You can buy stocks, also known as shares or equities, in that business. You can own them! Well, a small bit anyway.
Not sure what a stock is? Hold my oversized coffee and I’ll explain.
What is a Stock?
Now that you are starting out on your career you can use your new graduate pay check to own part of a business. If they are listed – like the examples above – on the stock market then you can buy stock in them and become a shareholder.
A stock is a tiny piece of ownership you can buy in a company. You may not have to stand behind a counter and deal with customers or even make any widgets or clean any windows, but you can still benefit from the company’s hard work and success.
If the company does well, the value of your stock will increase in price. This means that if you choose to sell the stock, you will make a profit. However, if the company performs badly because of a product that goes wrong or if the creative genius chief executive leaves then the value of your shares will also drop and you might lose money.
As a shareholder you might also receive what is known as a dividend. This is a regular payment from the company you are invested in. Free cash.
It also gives you other rights such as attending annual company meetings where you can get free drink and food!
Top Tips
You don’t just have to buy stocks in companies you know well or use every day. Perhaps you are a big believer in renewable energy and want to support that industry by buying stocks in a utility company making solar farms. Or you may think that investing in a healthcare business is beneficial because people will always have a need for drugs and treatments no matter how good or bad the economy is.
Whatever your choice you need to think long-term. Stock markets can be volatile and prices can go up and down every hour of every day. That can make some people nervous and sell too soon. Don’t do that!
You need to keep your stocks for years not weeks. That’s because stock markets historically increase in value over time. If you stay cool that then your money should also build and build.
What TipRanks Can Offer Graduates
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