Looking to start buying stock? It's as easy as 1-2-3. But it's not quite as simple to turn around and sell them later for a profit. The ability to know when to buy and sell is a skill that comes from more than reading this one article. But if simply learning how to buy is sell stocks is your goal, then invest a little time and keep reading!

First and foremost, what is "stock?" The definition of stock is ownership of a corporation represented by shares. Stock is often referred to as "equity." You own a share of a company if you buy stock or equity in that company. Even if your share in the company seems very minor, it still entitles you to a stake in the assets and earnings.

All stock purchases and sales go through an exchange. An exchange is an organized market that's been designed exclusively to buy and sell stocks, bonds, options and futures. Membership in the exchange, or having what's called a "seat," is required if you want to buy stock. For most of us, though, this just isn't realistic; the price for a seat on an exchange can run into the millions. But buying and selling stocks can be done another way. The alternative is to use a company that already has a seat on the exchange.

Stock ownership means you also have certain rights and privileges. You are entitled to add to your stake by buying more shares. But you can also sell off what you own or even transfer it to another person or entity. Being a stock owner may also give you a voice in company matters and allow you to cast a vote on company issues. Just how much your vote counts, though, may depend on how many shares you own.

Since you now have a stake in the company, you should know that you have a right to be informed. Most companies will mail notices whenever corporate changes are made. Also, if the corporation makes a profit and has money to spend, you may receive dividends. But it's up to the board of directors to decide whether to pay in cash or stock dividends.

As you start to research stocks, you'll find two types -- Common Stock and Preferred Stock.

Common stocks are the most popular stock traded. Being an owner of common stock entitles you to certain benefits: a share in the risk and reward of the company. If the company's stock value increases, your stock will likewise increase. If you are entitled to dividends, you may receive them as either cash or stock dividends. Common stock usually entitles you to vote on company matters. You might find yourself casting a vote on management decisions and corporate policies through a proxy.

Preferred stocks also represent a stake in a corporation but with a few additional perks. Preferred shareholders take priority when it comes to paying out dividends. They come first -- before common shareholders even get a penny. If the corporation goes out of business, creditors collect first. Next in line for any remaining assets are the preferred stockholders. This means the preferred stockholder of a company that's closed its doors takes priority over the common shareholder when it comes to paying out any remaining assets. On the downside, preferred stock does not go up in price the same way common stock would. Another important point -- preferred stock does not offer voting rights.

Next -- open a stock trading account so you can buy and sell stocks. You'll find there are many choices of brokers on-line. But you'll probably want to zero in on what is called a "discount broker." Something else you'll find online is "deep discount brokers." They offer cheaper per trade commissions. One last thing -- make sure you research a few brokers before you pick one. Good luck!

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Want to buy stock? It's easy. What's not quite so easy is buying now and selling later for a profit. Knowing when to buy and sell is a learned skill that is far beyond the scope of this article. But if solving the puzzle of how to buy and sell stocks is your aim, then read on!

First and foremost, what is "stock?" The definition of stock is ownership of a corporation represented by shares. Another name for stock is "equity." If you purchase stock or equity in a company, you own a share of that company. This ownership means you have a stake in the company's assets and earnings. It doesn't matter if your share seems tiny or insignificant.

All stock purchases and sales go through an exchange. An exchange is an organized market set up to buy and sell stocks, bonds, options and futures. You must be a member of the exchange, or have a "seat," if you want to buy stock. However, for most of us, buying a seat on an exchange is simply too expensive (expect to pay at least several million dollars if you want your own seat on an exchange). An alternative is to use a company or entity that already has a seat on the exchange.

Certain rights and privileges go along with stock ownership. You are entitled to sell your shares, purchase more, or transfer ownership to another person or entity. Stock ownership often means you'll also have the chance to vote on corporate issues. But your vote will also most likely be limited by the amount of stock you actually own.

Since you're an owner, it's also your right to be informed. So expect to receive notices whenever corporate changes take place. And there's the subject of dividends. The board of directors can decide to pay its shareholders in cash or stock dividend. But it also depends on whether the corporation makes a profit and has money to spend.

Common Stock and Preferred Stock are the two principal kinds of stock you'll find for sale.

Common stocks are the most popular stock traded. You will share in both the risks and rewards of a company as a common stock owner. If the company's stock value rises, so will your stock. Not all companies pay dividends. But if yours does, you are entitled to receive them as either cash or stock dividends. Another benefit of common stock is voting rights. Through a proxy, you will be able to case your vote on management decision and corporate policies.

You can also opt for preferred stock. You'll still have a share in the corporation -- but with a few differences. When dividends are paid, preferred stockholders take their share first before common shareholders receive a penny. If the corporation goes out of business, creditors collect first. Next in line for any remaining assets are the preferred stockholders. In effect, the preferred stockholder of a company that's folded would have access to any remaining funds before the common shareholders. On the other hand, preferred stock does not increase in price in the same way you can expect from common stock. Be aware, also, you only get voting rights with common stock.

Next move -- open a stock trading account. You'll be able to start buying and selling stocks! You'll find there are many choices of brokers on-line. But you'll probably want to zero in on what is called a "discount broker." Something else you'll find online is "deep discount brokers." They offer cheaper per trade commissions. It's a good idea to check out several brokers before you make a final decision. Good luck!

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