JEFF SCHLOTZHAUER  |  PHOTOGRAPHY EDITOR

Have you ever flipped on the TV to a national news station like CNN and seen a bunch of letters, numbers, and symbols scrolling across the bottom of the screen? Don’t panic; you’re not in The Matrix, you’re looking at the stock market.

For most of us, the stock market is a foreign language. If you’re like me and numbers scare you, there is a simple approach to understanding stocks and how to start looking into ways to invest.

Step one. What exactly are stocks? A stock is a portion of ownership in a company. When a company issues shares of stock into the market, people can purchase any number of shares available. When you own shares of stock, you are a part owner in the company. Each share of stock for a particular company is sold at a specific price. The only thing consistent about that price is that it is constantly changing. Without getting into the complicated nuts and bolts about what determines the price of the stock, the basic controlling factor of the stock price is company’s projected earnings. If a company is rumored to do well in the future, the stock price will most likely go up.

Step two. Create a list of companies you are interested in investing in. When you invest in a company, you are giving them your money in order to further their operations for success. Once you purchase the stock, it is yours until the company ceases to exist or until you sell it, and there are no monthly fees.

As novice investors, the first thing to recognize is that there is always going to be a certain level of risk, but any financial expert will tell you the greater the risk, the greater the potential return. This also includes the potential for loss. However, in the stock market, you can only lose up the amount of money that has been invested. If you purchase one share of stock in Microsoft, which is currently going for $27.25 and sell it one year later at a decreased value of $23.25, you have lost $4 in the process. However, you still receive $23.25 in return for selling the stock.

Step three. Companies are always looking for ways to keep people investing in their success. One of the ways they do this is through dividends. The best way to think of a dividend is like a server getting a tip at a restaurant. If a company decides to issue dividends to its investors, they will divide a percentage or specific amount of the retained earnings, or whatever is leftover from profits after they’ve calculated their expenses by the number of stocks they have outstanding. So, in addition to the amount of money your current stock is worth, you receive an additional payment whenever the company issues dividends. Dividends are the royalties a company pays to its investors in order to keep them from selling their stocks.

Step four. Find a stockbroker. Don’t worry, it isn’t as complicated as it sounds. When most people think of a stockbroker, they think of a Pierce Brosnan looking figure in an Armani suit holding a small notepad waving paper in the air, but that isn’t always the case. A stockbroker is your own personal middleman. He or she is the individual who will purchase, trade, or sell stocks on your behalf. In the age of technology, stockbrokers can be acquired through the Internet from websites like Etrade.com. Once you open an account, Etrade finds brokers to purchase, trade, and sell stocks for you.

So in reality, investing isn’t as complicated as it may seem. All it requires is finding companies you are interested in investing in, choosing the stock that is right for you, and finding a broker that will help you build your stock portfolio. Now that you see how simple investing can be, there’s no excuse to not invest in the potential profit.