Understanding The Stock Market
When the average person thinks of the stock market, they think that it’s too hard for them to do it and that they’ll lose their money. For those who don’t think that they have what it takes to do this, please think of this site as your guide to understanding the stock market.
It’s time that you take control of your financial freedom.
Financial freedom comes from learning what you need to in the world of investing and money intelligence. You don’t have to be an Einstein to reach that goal. If you were to read 1-2 hours a day on different aspects of investing, you will know more than enough to better secure you freedom.
When trading stock, there are many things that you need to be aware of in regards to each company that you invest in like financial statements, balance sheets, charts, and earnings reports just to name a few. You won’t need a BA in accounting to understand it all.
Financial statements provide an overview of a business’ financial condition in both short and long term. A balance sheet is like a snapshot of a business’ financial condition at a specific period of time, typically it would be a three month period. A balance sheet consists of assets, liabilities and stockholders or owners equity.
The chart is exactly that, it’s a chart to show you the price per share movement over a period of time (day, month, year). As for an earnings report, a company reports their progress (gains and losses) during a three month time frame to it’s shareholders and other investors in a very detailed manner.
Take your time to learn these tools that you will need to understand when trading stocks. There is quite few more things within the stock trading world and most of them will be covered here in layman terms to make it easier for you.
Tags: balance sheet, balance sheets, earnings reports, financial freedom, financial statements, stock trading, stockholders, trading stock, Trading Stocks, Understanding The Stock MarketRelated posts
How I Started Understanding The Stock Market
When I started trading stocks, I didn’t know what I was doing to a certain extent, but I kept on learning about the stock market and I ‘m understanding the stock market better each day. You don’t just study until you know it all because 1) it’s impossible to know everything since each day is different and 2) You can’t really learn about the markets unless you are in the markets.
I love the stock market and enjoy what I do for a living now. It’s taken some time for me to feel confident enough to do it as a full time job, and now that I have built-up a good looking portfolio and I don’t plan on getting a job where I work for someone else again.
When I was in my 20′s I used to listen to the headlines to get a feel for what was going on. Yes, I missed out on the boom in the 90′s, but that’s okay because there will always be another one. Once I had my finances in order I started to put about 5% of my salary toward an IRA (besides what I was putting in my 401K plan). I traded what the market refers to as penny stocks (stocks valued at $5 a share or less), which was pretty good since if I did my homework I could make 50% gain on the money I invested in a matter of a few days or sometimes in one day because of some great news that came out on the company. Don’t get me wrong, but there were also days that I would lose that much just as quick because of some bad news or mis-information.
You need to understand the stock market as well as how each sector affects each other. Oil and the world economy is something to take into consideration if you really want to be the best trader that you can be. You can’t possibly know everything about the markets, but the more you know the better off you’ll be. Take your time and learn the basics before you put your money on the line, but like I said don’t wait until you know it all. You to can understand the stock market where you can make great gains, but it doesn’t happen over night.
Tags: 401k plan, penny stocks, Trading Stocks, Understanding The Stock Market, world economyRelated posts
Some Insight To Understanding The Stock Market
Many people that have trouble understanding the stock market. They think that just because they were able to make money in their first trade or two, that they now know what they’re doing. Most likely you will get lucky from time to time, but you can’t continue to trade like that. Trading in the stock market is not for the faint of heart, it is not like taking a trip to Las Vegas and letting it ride on 32 black (I don’t know if it’s black or red, but you get the idea).
What I’m trying to say is that you need to educate yourself in the stock market as well as each individual stock that you’re going to invest in before you put your money to work. When someone refers to the stock market they refer to all the different markets that are out there. The big three that they talk about is the DOW, NASDAQ and the S&P 500. there is also the NYSE (New York Stock Exchange), NYMEX (New York Mercantile Exchange) and the CME (Chicago Mercantile Exchange).
Depending on what type of stock you want to invest in you need to know the sectors, Financial, technology, Biotech, Retail, Agricultural, Energy and there are more that I won’t even get into talking about in this post. The point is that there are quite a few things that you need to learn because if you don’t, your luck will only take you so far before you start to lose it all.
Just because you like Google and you use it all the time while on the internet doesn’t mean you know what is going to happen to the stock itself. In 2008 the analyst were say that Google would go to $1000 per share in no time. They said that when the stock was climbing over $700 a share, but six months later it’s was trading at $400 a share. The company is still a great and growing company, but if you listen to the “experts” and bought 100 shares, you would be out $30,000. The stock he company was effected by the overall condition of the markets as well as people who made a killing in the stock, decided to sell, causing the price to come off it’s rally.
Another part to understanding the stock market is that there are Treasury bonds, aka T-bills. it’s a piece of paper telling you that you are going to receive a fixed sum of US dollars at some designated point in the future.
They’re held for a set amount of time before you get the full advantage of the interest that was offered to you when the bond was purchased.
ETF’s and Mutual Funds are (for lack of a better word) stocks of a index of stocks in one sector. You can purchase these types of investments without having to pick one particular stock, instead you can be invested in an index of agricultural stocks or even the financial sector. The choice is yours to decide.
Tags: agricultural energy, chicago mercantile exchange, financial technology, nasdaq, new york mercantile exchange, new york stock exchange, nyse, Understanding The Stock Market