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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our investing reporters and editors focus on the points consumers care about most — how to get started, the best brokers, types of investment accounts, how to choose investments and more — so you can feel confident when investing your money. Investing disclosure: The investment information provided in this table is for informational and general educational purposes only and should not be construed as investment or financial advice. Bankrate does not offer advisory or brokerage services, nor does it provide individualized recommendations or personalized investment advice. Investment decisions should be based on an evaluation of your own personal financial situation, needs, risk tolerance and investment objectives. Investing involves risk including the potential loss of principal. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Stock charts and their accompanying data can appear complex and may be difficult to understand for new investors. The good news is that with a little help, these charts — and the information they contain — can be useful during your research process to more easily identify attractive investment opportunities. By understanding the basics of how to read a stock chart, you’ll be able to more quickly and choose which investments are worth digging into further. Here are the basics on reading stock charts for beginners. How to read a stock chart
Stock charts can vary depending on the platform you’re using to view them. Several financial websites offer them for free, but you can also find stock charts through . The example chart below comes from Google Finance: The chart
Looking at a stock chart is one of the easiest ways to get a sense for how the stock’s price has performed over a certain period of time. With price per share on the y-axis and time on the x-axis, you can quickly see where the stock has been trading. The top of the chart lets you select different time periods to evaluate. The big number in the top left is the current price per share ($998.50). Below that, you can see how the stock has changed over the time period you’ve selected. You can see Tesla has increased by $284.78, or nearly 40 percent, over the past year. One cool feature of Google Finance charts is that the chart line turns green or red based on the stock’s performance during the period of time you’re looking at. In the example above, increased over the prior 12 months, so the chart is green. Looking at the long-term price chart is likely to give you the best sense of how the underlying business has performed. . But over time, they tend to reflect the performance of the underlying business. Stock chart data basics to know
There is typically data that accompanies any stock chart that you’ll come across. Here are definitions of the most common stock market terms you’ll find. Open: This amount refers to where the stock’s price opened for trading on that given day. High/low: These numbers are the highest and lowest prices that the stock traded at on that day. Market cap: This figure refers to the , or the value of all the company’s outstanding shares. You can think of it as what it would cost to buy the entire company at the current price. P/E ratio: This number is a and looks at where the stock price trades relative to the underlying company’s annual earnings. The is one of the most popular in investment analysis and helps investors determine whether a stock is appropriately valued. Dividend yield: This figure is calculated by taking the and dividing by the current share price. Dividends are a way for companies to share profits with shareholders. 52-week high/low: These are the highest and lowest prices the stock has traded for in the past year. on lists of companies trading near their 52-week lows. Other stock market terms that may come up
As mentioned, stock charts can be different depending on where you’re viewing them. Here are some other terms that you may come across when you’re looking at stock charts and researching companies. Volume/average volume: Volume refers to the number of shares that have been traded in a given day. You may also see numbers for average volume, which shows the average daily volume over some period of time, such as 30 days. Most large companies trade millions of shares each day. EPS: This abbreviation stands for , which measures how much a company made in profit per share. Ex-dividend date: This refers to the date you must be a shareholder by in order to receive the company’s next dividend payment. If you don’t own the stock on this date, you won’t get the next dividend. : This numerical value is used by some investors to measure the riskiness of the shares based on their underlying volatility. Betas above a value of 1 have been more volatile than the overall market over the specified time period, while a beta below 1 means the shares have been less volatile. Not all investors agree that share price volatility is the best indicator of risk. One-year target estimate: This value is an estimate of where the stock price will be in one year and is typically based on an average of several analyst estimates. This number should not be overly relied upon, as many forecasts turn out to be wrong. Bottom line
Stock charts and the data that comes with them can be useful tools when you’re researching a new stock idea. Once you get the basics down, you can quickly glance at many different charts and take in a lot of key information. Though stock charts often highlight how volatile prices can be — especially over short time periods — keep in mind that the key long-term driver of a stock’s price is the underlying company’s earnings and cash flow. A stock can ultimately only be as successful as the business itself. Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation. SHARE: Bankrate reporter Brian Baker covers investing and retirement. He has previous experience as an industry analyst at an investment firm. Baker is passionate about helping people make sense of complicated financial topics so that they can plan for their financial futures. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money.