Checking Your Stock s Performance

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Checking Your Stock's Performance

Once you have actually invested in a particular stock, you are no longer dealing with abstract ideas and numbers . Instead, you are dealing with cold hard cash. And, since this cash is yours, it's definitely important. Checking your stock's performance is every bit as essential as reevaluating your portfolio. In fact, the tangible information used to reevaluate your portfolio is gained by checking your stock's performance.

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Check your stock's performance with tools such as indices and financial media to determine whether your stock's behavior is consistent with your initial expectations of the stock's potential.

What's more, it's fun! Investment maintenance can be fun? You better believe it! As a matter of fact, checking on your stock is one of the privileges of stock ownership. While all your friends and family are reading the comics in the newspaper, you can turn right to the financial pages and impress the pants off them. You can tell those same friends and family to buy a certain product or use a service because you have a vested interest in the company (being part owner and all). You can watch CNN financial news and have it mean something to you. You can do all these things and more because you are now part of that elite group who stands by the bar at parties and discusses their investments. You are an investor. Don't miss out on the perks.

There are a number of vehicles for checking your stock's performance. As with the various types of investment strategies described in the previous lesson, here, too, you have a smorgasbord of methods to choose from. You probably won't need to know all the various methods , but you should pick a couple with which you are most comfortable and use them to check your stock's performance on a regular basis.

Descriptions of several of the more popular methods follow for your perusal. As you begin to check your stock's progress on different ve-hicles, do not be surprised to discover that each vehicle will probably give you a slightly different view of the stock's performance. That is because these vehicles are designed to measure a certain aspect of your stock, not the entire stock. Some will be concerned with the percentage rise or fall of your stock's prices, whereas others will compare the stock with other similar stocks to draw conclusions. Your job is to put all of these views together and create a cohesive picture that best depicts the performance of your stock. The vehicles you use should be ones that you are satisfied with and that you fully understand.

For example, in high school, each teacher gave you a grade in each subject ”an A in math, a B in English, and an A in science, for ex-ample. At the end of the year, all those grades were added up to obtain your grade point average, and that number was a much better indicator of the kind of overall student you were than the single grade you received for your performance in just one particular subject. Stock maintenance is no different. Assemble those different "grades" that each measurement vehicle assigns to your stock's ability to pay dividends , produce capital gains, and remain liquid, for example. Then, with all that information before you, evaluate your stock.

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