How To Read A Stock Chart | Investing For Complete Beginners

Hey guys, welcome to my new series,

Investing for Complete Beginners, the

Joy Yang Way. This is not like your

average beginner guide video that either

gives you too much textbook basics or

makes you feel overwhelmed and wanting

to give up before you even start. My

goal in this beginner investing series

is to make all of you take action right

after watching my tutorial. So, our

first tutorial is on how to read stocks.

To be clear, I want to make sure that

you leave this video with two actual

investing skills. One, when you look up

a stock chart, you know how to read it

and how to make sense of it. Two, you

know how to read the essential financial

data about a company and its stock. And

with these two skills, you will be able

to have a very basic understanding of

whether a stock is a good investment to

buy or you should avoid it. If you are

ready to learn, make sure to bookmark or

save this video, take screenshots

whenever you need to, and best if you

can have your computer by your side to

get your hands on actual practice. Oh, I

forgot to mention the most important

step. My editor just asked me to remind

you guys. Don't forget to like this

video. It's a free way to support the

channel and it means a lot for the hard

work that we put in into this video. For

this tutorial, we'll use Yahoo Finance

because it's free, beginnerfriendly, and

it shows you everything you need to know

in one place. If you have your computer

with you, go ahead and type

finance.yahoo.com into your browser. You

should see a search bar right at the top

of the homepage.

To look up any stock, simply type the

company name or its ticker symbol. A

ticker symbol is basically a short

abbreviation for the company's name. For

an example, AAPL is Apple and Coca-Cola

is KO. And if you're searching for

Canadian companies like TD Bank, you'd

have to

put at the end or

Nbridge.TO. Once you search, click on

the correct results and it'll take you

straight to the company's stock profile

page. At first glance, you'll see three

main areas on this page. At the very

top, you'll have the current stock price

and the price movement today. Right

below that, you'll see a chart that

visually shows the stock prices

performance. And if you scroll down just

a little further, you'll see some

essential financial numbers about the

company. Don't worry if this page looks

complicated right now. By the end of

this tutorial, every number and graph

here will make sense. So, let's quickly

recap how easy that was. So, step one,

go to Yahoo Finance. Step two, type the

stock's ticker symbol or company name

into the search bar. And step three,

click on the correct result to land on

the company's stock profile page. Now

that you know how to use Yahoo Finance,

let's get into the real tutorial. How to

read the stock chart. Part two, reading

the one-year and 5-year stock

charts. Let's continue with Apple's

stock page as our example. Right below

the current stock price, you'll see the

stock chart. By default, it usually

shows the 1day price movement, but we're

investing for the long term. So, I want

you to click on the one Y, which means 1

year, and then 5 Y means 5 years. Let's

first look at the one year. This chart

shows you how the stock has performed

over the past 12 months. You'll notice

the line moves up and down. This

represents the stock price over time.

Hovering your mouse over the line gives

you specific dates and the exact price

at that point in time. Here's what I

want you to ask yourself when you're

looking at the one-year chart. One, is

the price generally moving upwards,

downwards, or sideways? This tells you

if the stock has been growing or falling

or just staying stagnant. Number two,

are there any major drops or spikes? Big

sudden changes could mean that there was

news or an event that affected the

stock. We'll talk about this in future

videos, but it's good to develop a habit

of noticing these big moves. Now, the

five-year chart gives you an even

clearer picture of how stable or

volatile a stock has been. When

investing, we want to pick companies

with a generally upward trend over the

long term. Apple, for example, clearly

shows steady long-term growth despite

some dips along the way. Ask yourself

these questions for the 5-year chart.

One, does the stock show steady

long-term growth? If yes, that's usually

a good sign of a healthy company. Number

two, did the stock bounce back after any

significant dips? This shows resilience,

indicating that investors regain

confidence after temporary setbacks. In

general, good stocks for beginners show

consistent growth over time and can

recover quickly from downturns. That's

exactly what we want to see on a

long-term stock chart. I'm trying to

keep my explanations in the simplest

form so that if you're completely new to

the world of finance, you can still

follow along my tutorial and take action

right now as you're watching. Of course,

there's always more to learn about

investing, but the best way to start is

by taking action. You won't gain

experience by waiting. You need to at

least start practicing now. That's why

I'm giving you my favorite chart to

focus on first, the one-year and the

5-year charts. Remember, the one-year

and 5-year charts are going to be your

best friends for long-term investing.

Also, comment one and five below to let

me know that you're actually paying

attention to this pro tip. Now that you

know that these charts are actually not

difficult to read, let's move on to

reading the essential financial numbers

so you can confidently decide if the

stock is worth your money. Part three,

reading essential financial numbers on

Yahoo Finance. Now, let's scroll down

slightly below the chart. You'll see an

area called summary or key statistics.

These are the most essential numbers

that you should know when considering a

stock. Today, we'll only focus on the

basics you need to confidently start

investing. So, please don't be afraid of

numbers. I'll keep this super simple and

straightforward for you. There are only

four financial terms that I want you to

learn in this video. The first thing to

pay attention to is something called the

market cap or market capitalization.

This just means the total value of the

company or simply put how big the

company is. A higher market cap usually

means the company is stable and well

established. For beginners, it's usually

safer to pick larger companies with

market caps above 10 billion or we call

those blue chip stocks. So there you

have another pro tip. Remember, focus on

stocks with market caps above 10

billion. Next, look at the PE ratio,

which stands for price to earnings

ratio. This number tells you how much

investors are willing to pay for every

dollar the company earns. A lower PE

typically means the stock could be

undervalued or cheap, while a higher PE

means investors have high expectations

for future growth. As a rule of thumb

that I personally use is a PE below 15

is considered cheap or undervalued. A PE

between 15 to 25 is above average. A PE

above 25 means investors expect the

company to grow significantly in the

future. I'm putting them here all

together for you to take a screenshot.

So don't stress if you need time to

remember these numbers. Another

important number is the dividend yield.

This tells you how much cash the company

pays you every year. Apple, for example,

pays a small dividend. Companies like TD

Bank or Embridge usually pay higher

dividends. Dividends are great because

they create passive income and you can

reinvest that money to grow your

portfolio faster. Dividend yield is my

favorite financial number to look at

because I'm a huge fan of dividend

investing. Dividends is literally you

getting paid by the company just because

you're holding their shares. Not all

companies reward their shareholders. So,

if you are interested in companies that

I'm investing in, make sure you're

following me on Blossom. If you haven't

used Blossom, you can download this free

app in the description below. Lastly,

let's look at the 52 week range. This

shows the highest and lowest price that

the stock was has been in the past year.

It's useful to see where the current

price is within its range. If the price

is closer to the lowest point, it might

be undervalued or on discount. If it's

closer to the highest point, it might be

expensive. To recap, when looking at

these key numbers, ask yourself, does

the company have a large market cap? Is

the PE ratio reasonable, or does it look

too expensive? Does the company pay

dividends, and if so, how much? What is

the current price compared to its 52-

week range? Again, you can take a

screenshot of this recap that I put

together on the screen here. If you're

still with me, post your screenshots on

your Instagram stories and tag me to let

me know that you're learning. By now,

you've learned how to quickly read the

essential financial stats of a company.

With practice, you'll be able to

evaluate stocks in minutes and make

smarter investing decisions. Next, let's

wrap this up with a simple checklist so

you know exactly what to look at before

deciding whether a stock is a buy or a

pass. Part four, a simple checklist to

decide if a stock is a buy or a pass.

Now, to make your life easier, I'm going

to give you a simple four-step

checklist. Every time you look at a new

stock, quickly go through these steps to

decide if it's worth investing in. Step

one, check the long-term charts. Ask

yourself, over the past 5 years, has the

stock generally gone up? A good stock

usually shows consistent growth over

time? Remember, the 5-year chart is your

best friend here. Step two, check the

market cap. Is the market cap above $10

billion? Bigger companies are usually

more stable and safer, especially if

you're new to investing. Step three,

evaluate the PE ratio. Is the PE ratio

reasonable? Aim for stocks with a PE

ratio between 15 and 25. Below 50 might

be undervalued and above 25 could

indicate high growth expectations. Step

four, dividend yield. This is optional,

but I recommend this step for anyone

interested in getting more money from

your investments. Does the company pay

dividends? This isn't mandatory, but

dividend paying stocks reward you for

holding them. And if you can use that

cash to reinvest your portfolio, it'll

grow faster. If a stock checks off at

least three out of four of these

criterias, it's probably a good

investment to start with as a beginner.

Here's your checklist summarized on the

screen. Take a screenshot and keep it

handy when you're evaluating stocks. And

that's it. You've just learned exactly

how to read a stock chart and evaluate

the basic financial data. Investing

really doesn't have to be complicated.

You can bookmark this video or save it

in your YouTube playlist so that you can

always use this for a quick revision.

Comment down below to let me know what's

the next topic that you would like me to

cover in the Joy Yang's beginner

tutorial style. If you can't think of

any, I have two options here. Let me

know which one you prefer to see next.

one, how to create an investing watch

list, or two, how to find stocks to

invest in. Before you go, consider

subscribing to this channel if you

haven't, and let me know your feedback

on this tutorial format. Should I keep

doing this for you guys? Let me know.

And click this video over here to watch

the breakdown of my entire investment

portfolio. See you in the next video.