How can I make sense of the numbers?

Pictures often tell a story far better than words or numbers. I could describe a dragonfly as an insect that has four wings, a long slender body and huge eyes. But that lacks power. A picture tells you so much more. We have often heard the phrase “a picture is worth a thousand words.” A picture or graph can often take a thousand numbers and paint a helpful view for a probing investor.

Here are three reasons I think charts can be helpful to an investor: A chart…

  1. Can reveal trends in the price of a stock, the changes in a dividend or the direction earnings have gone and may likely continue to go.
  2. Makes it possible to quickly compare two different investments.
  3. Can help you estimate future results or opportunities based on past behaviors. For example, if a stock bounces up and down between two prices several times in a year, it might be possible for a wise trader to use that information to “buy low and sell high.”

One good tool is the free Stock Charts tool. Here is a link that shows the price of AT&T (T) stock against a competitor, Verizon (VZ). A chart doesn’t tell you about the quality of an investment, so there are other data elements to consider. You should also evaluate how news stories or the performance of a sector might be influencing prices. The Stock Charts view will not tell you which company is more diversified or has growing earnings.


Here is the chart after I tweaked some of the default settings for “color scheme” and to add the Y-Axis ending values:

Stock Chart AT&T and Verizon