This document provides an overview of the stock market for beginners. It defines the stock market as a place where public companies offer shares that can be bought or sold. It then describes how the stock market works by comparing it to farming, with stock brokers planting seeds (investing money) and reaping profits by selling crops (cashing out investments). Finally, it offers tips for getting started, such as researching companies, setting up an investment account, and buying shares to build a diversified portfolio. Key things to research about companies include their market cap, dividends, PE ratio, beta, volume, and stock price trends. Understanding these fundamentals can help beginners get started successfully in the stock market.
This document provides an overview of the stock market for beginners. It defines the stock market as a place where public companies offer shares that can be bought or sold. It then describes how the stock market works by comparing it to farming, with stock brokers planting seeds (investing money) and reaping profits by selling crops (cashing out investments). Finally, it offers tips for getting started, such as researching companies, setting up an investment account, and buying shares to build a diversified portfolio. Key things to research about companies include their market cap, dividends, PE ratio, beta, volume, and stock price trends. Understanding these fundamentals can help beginners get started successfully in the stock market.
This document provides an overview of the stock market for beginners. It defines the stock market as a place where public companies offer shares that can be bought or sold. It then describes how the stock market works by comparing it to farming, with stock brokers planting seeds (investing money) and reaping profits by selling crops (cashing out investments). Finally, it offers tips for getting started, such as researching companies, setting up an investment account, and buying shares to build a diversified portfolio. Key things to research about companies include their market cap, dividends, PE ratio, beta, volume, and stock price trends. Understanding these fundamentals can help beginners get started successfully in the stock market.
This document provides an overview of the stock market for beginners. It defines the stock market as a place where public companies offer shares that can be bought or sold. It then describes how the stock market works by comparing it to farming, with stock brokers planting seeds (investing money) and reaping profits by selling crops (cashing out investments). Finally, it offers tips for getting started, such as researching companies, setting up an investment account, and buying shares to build a diversified portfolio. Key things to research about companies include their market cap, dividends, PE ratio, beta, volume, and stock price trends. Understanding these fundamentals can help beginners get started successfully in the stock market.
What is the Stock Market? The Stock Market is a market where p ublic companies (Companies that you can buy stock from) offer shares that can be bought, sold, or held. There are two main groups that get involved with stocks. Stock brokers and firms buy, sell, and hold stock for you. They take your money and invest it into the market. The broker and firm make money by taking commission, which is basically just their cut. There's also investors like you and me. Nonetheless if you own stock you're known as a Shareholder. Shareholders face r isk e veryday! For example, you could buy stock in a bull market (profitable returns), and suddenly the market can c rash, and you'll be placed into a bear market (unprofitable r eturns). The point is, NO ONE knows what the market will look like. Investors can try and predict the market, kind of like a weatherman. They do this by following t rends (or direction of the market or a stocks price). One way investors do this is by following and analyzing a Market Index, let's say the S&P 500. Following an index will show how the market is performing.
How Does it Work? The vast world of the stock market can be confusing, challenging, and even dangerous...Especially for a beginner. T o simplify things, we can look at the stock market like a farm. You, the farmer, take a few seeds you inherited or have laying around, and plant them in a field. You fertilize them, water them, and even shelter them. The seeds grow into plants and produce fruit. You then collect the fruit and sell it for a profit. Now let's look at this scenario but instead of a farm, we're on Wall Street ready to start our new job as a stock broker! You, the stock broker, take money that a client at your firm has trusted you with and invest it into the market. You trade, analyze and follow t rends. The stock reaches a price you're comfortable with. You cash out and distribute the money to your client, and you the broker make money via commission. If you're like me, you're not a stock broker, and you don't work on wall street. Well, not yet at least. The basic concepts of the stock market are the same for everyone. What differentiates me and Warren Buffet, is how big time traders go about it!
How to Get Started! After developing a basic understanding of what the stock market is and how it works, we can now move on to how you would get started! The goal of all shareholders is to buy s tock in hopes of making a proftbale return. To do this, you need to buy the right stock. A lot goes into buying the right stock, including following stock trends, watching the market through a market index (S&P 500), and even following a company's moves and decisions via their website, instagram, youtube, etc. Once you've researched and found a company you think will make you money, you need to find a place to do the actual trading and investing. There's three main ways to do this. You can do it yourself using a trading app on your mobile device or computer, you can visit a firm and work with s tock brokers. (Who will do the work for you). Or you can visit our investment page, and begin your journey with us! Let's say you chose to do the investing all on your own. Ok, now you've researched and found the stock you want to buy, set up an account with a trading app, all that's left is to buy stock and be patient. Remember you can buy a certain number of shares too. Doing this will increase the amount you spend, but if the stock ends up rising you will make more money! Let's say you bought 3 shares of stock worth 10 dollars=30$ spent. Let's say the stock price per share goes from 10$ to 15$ in a matter of 2 weeks. You went from 30$ to 45$, 15$ profit! Now depending on the app you're using they will either take a small commission fee, or none at all. Nonetheless it was your first time trading, and this is your first step to achieving greatness!
How to Stand Out? Now we can add on to the basic concept of the stock market and trading, in hopes of becoming more successful. Once you've invested in a stock and start to get a feel for things, you should start building up a portfolio w hich is basically just a list of stocks. Building a portfolio is all about diversification. Lets say your portfolio is a vending machine. You the vendor stock up on 4 kinds of sodas. You turn on the news and see that one of the brands of sodas you bought is made of dog piss, meaning no one will buy it-Making it a waste of money. Since you're a smart vendor you made sure to incorporate diversification w ith your vending machine, allowing you to still be successful even though one of your sodas will not make you money. Earlier we mentioned following t rends, watching the market through a market index, and following a company's moves and decisions is what you need to do while picking a stock. As you grow as an investor there's more y ou can do in terms of picking and buying the right stock. Following the company's Market Cap is important. A company's market cap is determined by multiplying the current price per share, by the number of shares. (Bigger companies have bigger market caps). Another thing to look out for is a company's Dividend, which is basically just a piece of a company's earnings that is distributed to shareholders. More key things to look for while buying stock include: ● PE Ratio-Price divided by earnings per share. Lower PE Ratio=Higher profits. ● Yield-Ratio between stock price paid and the dividend paid-For example, if a stock is 100$ per share, and has a dividend of 5$. The yield would be 5%, divided 5 by 100 (Turn to percent). ● Beta-Measure of risk on a stock or portfolio. ● Volume-The number of shares that are traded on a particular day.
Like we mentioned earlier no one can predict the market...But, using and knowing these vocab words will help you in buying the right stock, and hopefully make you money!
Instant Download (Ebook) Understanding Price Action: Practical Analysis of the 5-minute time frame by Bob Volman ISBN 9789082278606, 908227860X PDF All Chapters
