Confused about the stock market? Check out this crash course

Share:

You’ve probably heard about the stock market in your life, but don’t really know what it is or how it works. Don’t worry, you’re not alone — many people are confused about the stock market and its general workings, even people who spend their lives working in finance! For your benefit, here is a crash course on stocks and the stock market to help you understand what the market can do for you, as well as what you need to know to keep yourself safe from financial dangers.

Basics of the stock market
The stock market is where investors buy and sell shares of publicly traded companies. It usually refers to the exchanges where stocks and other securities are traded. The stock market can be used to measure the performance of a whole economy, or particular sectors of it.

What are stocks
When you buy a stock, you’re buying a piece of ownership in a company. Publicly traded companies are required to share information about their business operations and finances, which helps investors make informed decisions about whether or not to buy their stock. The stock market is where stocks are traded between investors. It’s also where stocks are bought and sold by brokerages on behalf of their clients.
The stock market has two main types of participants: institutional investors and retail investors.

How do stocks make you money
Publicly traded companies are required to share their profits with their shareholders, so when the company does well, the value of your shares goes up. When you sell your shares, you can cash in on your investment.
The stock market is a collection of exchanges where stocks and other securities are traded between investors. It can be overwhelming to try to understand how it all works, but luckily there are resources to help.

Selling your stocks
When you sell your stocks, you’re selling shares of ownership in a company to someone else. The price of the stock is determined by how much people are willing to pay for it. The stock market is where people buy and sell stocks.

Investing 101
The stock market can be a great way to earn extra money, but it can also be confusing and overwhelming. If you’re new to investing, this crash course will help you understand how the stock market works. When stocks go up in value, that means the company is doing well. When stocks go down in value, that means the company is doing poorly.

Research Methods — Ben Graham and Peter Lynch
Ben Graham is considered the father of value investing, and his research methods are still used by investors today. He believed that by analyzing a company’s financial statements, you could identify undervalued stocks. Peter Lynch, on the other hand, is a growth investor. He looks for companies with strong fundamentals that are growing at an above-average rate.

Fundamentals of Value Investing — Buffett, Munger, Greenblatt
Many people view the stock market as a casino, but it doesn’t have to be. Value investing is all about finding companies that are trading for less than their intrinsic value. This means that you’re buying stocks for less than they’re actually worth. Over time, these stocks will likely go up in value and you’ll make money.