Learning About the Stock Market
Are you becoming more and more interested in learning about the stock market? With all the headline news based
on the Dow Jones Average and NASDAQ, you probably feel as if you need to know more about it and how the
fluctuations of the market affect you and the Average American down the street.
Learning about the stock market is not as complicated as it may seem at first, so you should not be intimidated.
The basic concept is really quite simple; of course, there are a multitude of subtleties involved, and that is
where experience is the best teacher, but just about anyone can learn about the stock market.
The best thing to do if you are interested in learning about the stock market is to read about it and talk about it
with others, and then set up your own faux stock market portfolio. That is, you pretend to invest by writing down
each day the decisions you would make if you were actually investing real money, and then chart your progress to
see how you did at the end of a certain period of time.
Of course, as you go along, if you see that some of your decisions were not the world’s best ones, you should
consult with others and think about what went wrong. And don’t forget to also make note of what went right so you
don’t forget when the time comes and actual dollars are on the line.
The basics behind the stock market are these:
* A stock, sometimes called a share of stock, is a piece of paper that costs you a certain amount of money to
get, and that piece of paper shows that you are part owner of that particular company.
• The ideal stock buy occurs when the stock is low-priced.
• The ideal time to sell your stock is when it has reached its highest value.
• The more volatile the economy, the higher the risk you take.
• Long-standing companies generally carry less risk but also tend to have higher costs per share of stock.
• The biggest stock markets are the NYSE and NASDAQ.
• When a business decides to sell stock in itself, it is called “going public.”
• The usual reason companies decide to go public is to increase their capital without having to secure a loan.
• The job of the investor is to learn as much about a company as possible, especially its value and potential for
profit and growth, and buy into that company as early as possible for as little as possible.
• Stockbrokers are people who earn their living by helping you buy and sell your shares of stock. You tell them (or
you decide together) when to buy and when to sell.
• The stock market is not a savings account; there is always potential for loss and potential for gain.
It should be quite obvious to you, that there is more to "learning about the stock market" than what is covered
above. However, with more due dillgiance and effort on your part, you will at least have a basic understanding of
the stock market.
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