A beginner's guide to investing in the stock market
posted on: 23-Aug-2017What you need to know about investing in stocks
The stock market can be an imposing place for someone new to it. Fortunes are made and lot relatively quickly in the stock market and many people are scared off by these price fluctuations. Having a beginner’s guide to investing in the stock market can provide an individual with a basic understanding of how markets work so that an individual can start trading in the market. Developing an expertise in the stock market takes years of diligence through research and trial and error. This article will discuss some of the introductory terms that are typically part of a beginner’s guide to investing in the stock market and what tools can be used to develop an understanding.
To begin with, any introduction guide to the stock market will discuss some basic definitions and introduce a new trader to the types of different investments that can be made on the stock market. This includes common stocks (also known as equities), preferred stocks, corporate and government bonds (sometimes labelled as fixed income), and investment funds (including mutual funds, etfs, and closed end funds). Developing an understanding of what these terms include is part of any introduction to the stock market. Once a new investor understands the types of investments available for trading, the next step is to understand how you can trade these various securities including going long or short through buying the security outright or through some form of a derivative on the position (such as an stock option). Understanding the options available for trading can greatly assist a new trader in getting acclimated to the market. From here, a new investor will simply need to understand how to open a brokerage account and to locate investments that they are interested in making. It is generally recommended that new investors start small until they become familiar and comfortable with trading in the market.