Making Money With Stocks
Here's how investors make money with stocks. One way is through capital appreciation, or making a profit by buying stock at a low price and selling it at a higher price. Wise and successful investors always follow this simple rule: "BUY LOW AND SELL HIGH".
For example: if you buy 1000 shares of Mcdonald's at $50/share(total investment of $50,000)and after three months the price moves up to $75/share and you sell it(total of $75,000), you have earned a capital gain of $25/share or $25,000. It's a 50% profit!
On the other hand, if you buy 1000 shares of Mcdonald's at $50/share(total investment of $50,000) and if the share price moves against you and you sell it for $25/share(total of $25,000), you have lost $25/share or $25,000. It's a 50% loss!
