How To Invest In STOCKS As A Beginner

There are two possible ways. The first way is when a stock you own appreciates in value - that is, when people who want to buy the stock decide that a share is worth more than you paid for it. 

They might decide that because the company that issued the stock has earnings that are improving, for example.

If you hang onto a stock that has gone up in value, you have what's known as unrealized gains. Only when you sell the stock you can lock in your gains. Since stock prices fluctuate constantly when the market is open, you never really know how much you're going to make until you sell.

The second way is when the company that owns the stock issues dividends - a payout that companies sometimes make to shareholders.

A dividend is a payout that some companies make to shareholders that reflects the company's earnings. Often paid out quarterly (every three months), dividends give stockholders a steady return, regardless of what happens to the stock price.

Typically, older, well-established companies pay dividends, while newer companies do not. Dividends are not guaranteed, so a company can stop paying them at any time.

To keep your money growing as fast as possible, it's smart to keep reinvesting your dividends rather than spending them when you receive them. The easiest way to do this is to sign up for a dividend reinvestment plan (DRIP), which will make reinvestment automatic.