Everything is made of parts/ingredients. The price of these ingredients, therefore, affects the price of things... affects the price of their stocks.
Example: Latte ingredients are espresso beans, milk and electricity used to produce the lovely froth. This is important if you invest in Starbucks. This year, not only has electricity been higher to buy, but natural disasters have severely affected the coffee bean crop. Prices for 2 of the 3 commodities have been higher; this forces coffee retailers to increase their already high prices and consumers have begun decreasing consumption, substituting Starbucks for a McDonald's latte or a Keuring machine that makes delicious drinks at home. Starbuck's stock will see a decrease if they do not control prices but if they cannot make a profit, they will also lose money and face a stock fall. Be aware of their actions and adjust your portfolio accordingly.
#2 PENNY STOCKS
Stocks you can buy for pocket change. Literally. They are so cheap because they are pretty useless but on occasion they do "hit." If it sounds like Vegas, it is. Only buy if you have money that you will not miss at all.
Example: Pier 1 Imports was failing in 2007, with its stock down to 7 cents a share. The company should have failed but they hired a new CEO who made some good changes. Today the stock is worth $11/share. Doesn't seem like much compared to Apple but had you invested $7 instead of throwing it away on useless crap (what useless stuff did you purchase in 07?) you would have $1054 today. That makes some pretty nice pocket change.
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