How do you lose money when you buy a stock cant you just hold it until the price is up again?

Question

Also how do dividends work and how do you get money from them.

Answer 1

Investing in the stock market isn't for the timid. Don't always expect the price to skyrocket in a day or two. Sometimes it takes YEARS. Do you have confindence in the company and what it produces? Do you have confidence in it's leadership?

About every four months,you'll receive a check from the company treasurer depending on how many shares you own.

Answer 2

You can! Usually if you want to make money from stocks, your time horizon has to be long term. In the long run stock prices WILL go up despite the daily fluctuations. And dividends are paid per share, usually with  brokers, it gets deposited right into your brokerage account. I think long term investing (like 10 years or even 5) is best for earning money. There are some hyper active traders but I dont think its great to do that, transaction costs can empty your wallet fast. But dont own just 1 stock, diversify your portfolio and hold.

Answer 3

what if it just keeps going down.. many stocks have done that

what if it takes 5 years to recover, then you have lost 5 years of gains from another investment.

Answer 4

You're assuming the stock price will go up again- they don't always do that.  

However, even if you somehow knew it would rise again, you may choose to sell it if there are other investments that may rise more quickly.

Dividends are optional payments that a company may pay to shareholders.  If you own stock in a brokerage account, the dividend will be credited to the account.  If you own a certificate, a check will be mailed to the address that the transfer agent has on file for you.

Answer 5

You can hold it if you think it will go up again.  Some do, and some don't.

Dividends are paid out as a check or can be reinvested in more stock in the same company (a "dividend reinvestment plan" or DRIP).  A DRIP is a great idea if one is available for the stock you own.  Otherwise, you will just waste the $23 dividend check on a carwash and Starbucks, but with the DRIP, that money will go directly into an investment of more shares of stock.  After several years, you should have a larger investment.

Answer 6

it may never go up again. It could also go Bankrupt and you can lose everything if the declare chapter 7

Answer 7

No one knows if the stock will ever go back up again, remember the name Enron?

Many stocks never go back up, look at pinksheets.com, many of those stocks will never see their old price again

Dividends are distributions made by corporations to their stockholders.  The distribution is usually in the form of cash, but companies can pay shareholders in stock

The dividend are paid directly to the shareholders, checks are either mailed to their address of record or to whom ever is holding the shares for them

Answer 8

Interesting two part question:

1.HOW DO YOU LOSE MONEY WHEN YOU BUY A STOCK, CAN’T YOU JUST HOLD IT UNTIL THE PRICE IS UP AGAIN?

Theoretically, you can hold until the price goes up again, but, some never go up again.  Some even drop to 0.0001 per share and some of those don’t even have a bid because no one wants them.  There is no guarantee that your stock will go up in price again.

Some stocks do a reverse split which doesn’t always end well.  For example, let’s say you own 50,000 share in xyz company and they do a 1/50 reverse split (r/s) you will end up with 1,000 shares.  Theoretically, you will have the same total value with higher priced shares.  However, sometimes the price drops right back down to where it started leaving you with far less value.

Some companies issue a lot of extra shares and sell them into the market which drives the price down.

Some companies give out shares to finance companies in exchange for badly needed cash to run their business.  Finance companies can cause the stock to go down when their shares are sold into the market too quickly.

Some companies go bankrupt.

Bottom line is there is NO GUARANTEE that a stock will go up.

Many variables exist which might lead one to believe holding a losing stock is better than selling it, but, I don’t have the time to go into it.  I’m just answering your first question about holding a stock until the price goes up.  Sometimes it works, sometimes it doesn’t.

2.ALSO, HOW DO DIVIDENDS WORK AND HOW DO YOU GET MONEY FROM THEM?

Some companies pay dividends in the form of stock and others pay out in cash.  Some stock dividends can be sold immediately, while others have time restrictions as to when they can be sold.  Not all companies pay dividends.

You should get yourself a book on stocks and the markets.  Some buy stocks based on fundamentals of the company, others go strictly by the chart.

Good luck in your investing.  There are many interesting stocks out there.  Be realistic in what you expect out of them and do a bit of research if you are looking for a longer term investment.