Companies choose how many individual stocks they want to make available during the IPO process and each stock’s initial price.
Also known as “going public,” the process typically takes about six months. Upon completing this initial offering, publicly traded companies list on the stock market.
The primary factor driving the demand for particular stocks centers around a company’s ability to earn money and ultimately grow.
Generally speaking, as a company’s profits increase, so will share prices. Since a stock represents an ownership share of a business, most investors want to buy stocks that will increase over time.
You can make the stock market work for you, buy and sell for quick capital gains, or grab stocks that pay dividends.
There are two avenues investors can pursue when looking at stocks: direct ownership and indirect ownership.
- Price-to-earnings (P/E) Ratio - Market Capitalization - Past Performance