How Do You Make Money By Selling Shares/stock Short?

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Many people make their money on the stock market by following the old adage of ownership depression and selling high. However, that'due south not the only style to make money -- and it certainly creates a puzzler for you if you lot think the stock cost is going to go along ascent simply you take no other way to get income from the company besides selling. Some other way to make money is by picking stocks that pay dividends, which are payouts of the company's profits to the shareholders based on the number of shares they own.

Step i

Inquiry the history of dividends that a company has paid out. A history of increasing dividends bodes well for future dividend payouts. Co-ordinate to the Kiplinger website, when a company consistently pays out dividends, shareholders come to look the dividend checks to continue flowing, which in turn forces the company to programme alee for making continued payments.

Step two

Invest your money in a portfolio of stocks that have a history of paying high dividends. That fashion, you tin expect to receive a steady stream of income without selling your stocks. In add-on, if you detect yourself needing money, in that location's nothing stopping you from selling your shares and cashing out.

Pace 3

Hold the stock for at least 60 days of the 121-day menstruation starting 60 days earlier the ex-dividend date, so that the dividends authorize as long-term uppercase gains. If yous hold it for less than 60 days, y'all however go the dividend but it'south taxed at the ordinary income rates. Because your long-term upper-case letter gains charge per unit is always lower than your ordinary tax rate, this maximizes the corporeality yous get to keep.

References

Warnings

• Dividends aren't a get rich quick scheme where you tin can just buy the stock right before the dividend and then sell it after. When a visitor pays a dividend, it's stock price typically drops by the same amount of the dividend because the visitor is worth that much less. For example, say a company has $100 one thousand thousand in avails and it pays a $1 million dividend. The company is now worth simply $99 million, and the stock price will by and large change to reflect that.
• Dividends aren't guaranteed, and so no matter how well the company has performed in the by or how many consecutive years it's raised its dividends, yous're non promised to receive dividends in the future.

Author Bio

Marker Kennan is a author based in the Kansas Urban center area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

Source: https://budgeting.thenest.com/make-money-stocks-selling-30823.html

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