The Stock Market: Teens’ Edition

The stock market can be a confusing place, but it can lead to significant profits.

Tommy Billings, Columnist

The stock market is an overwhelming monster that frightens many, so they don’t experiment with it. But don’t worry, because The Horizon Sun is here to help you out, giving you the essential information you need to get into the stock market.

A stock is a very small portion of a company that the public can buy. There are two main types of stock to buy: common and preferred stock. Common stock allows owners to have one vote per share in company matters. However, there may not be a dividend, which is money that is paid to you for owning the stock, which is typically paid every quarter (three months).  Preferred stock may not let you vote, but you are guaranteed a consistent dividend.

Some stocks are very risky to buy, but others are less of a gamble. Penny stocks are usually stocks under 10 dollars, making them a risky buy. They are considered a gamble because they are small companies that may not succeed; they may go bankrupt. Penny stocks also have a capability to skyrocket in price, resulting in huge profits. Most people tend to go with what people call “blue chip” stocks. These usually have steady growth and a dividend, making them a good, reliable pick.

Apple is considered a good, reliable pick with good history. It’s down over the past few months, but with the iPhone 7 coming out soon, it’s sure to rebound again as it does with every iPhone release. Apple also has a 2 percent dividend, not as good as some other stocks on this list. Nike has had steady gains these past few years and looks to continue it further in 2016 and beyond. Nike has a 1.1 percent dividend. Ellie Mae is a software company that is very fast growing and experts agree it will continue to grow, although it does not have a dividend. GoPro has a bright future, consisting of the Hero 5 and Karma cameras as well as drones. However, there is no dividend. The last stock we recommend is Enerplus. Enerplus is a top pick for many top stock advisors because of its 7.3 percent dividend and current extreme low price, set to skyrocket back once oil prices rise up again.

Before you buy or sell stock, be aware that you have to report all profits to the government. They then take some of your profits. It’s called capital gains. You also have to use a company like Fidelity to actually buy and sell stocks. Make sure you know all about that stuff before you do anything with the stock market.