Stock Basics: Conclusion and Resources
Let's recap what
we've learned in this tutorial:
- Stock means
ownership. As an owner, you have a claim
on the assets and earnings of a company
as well as voting rights with your shares.
- Stock is
equity, bonds are debt. Bondholders are
guaranteed a return on their investment
and have a higher claim than shareholders.
This is generally why stocks are considered
riskier investments and require a higher
rate of return.
- You can
lose all of your investment with stocks.
The flip-side of this is you can make a
lot of money if you invest in the right
- The two
main types of stock are common and preferred.
It is also possible for a company to create
different classes of stock.
- Stock markets
are places where buyers and sellers of stock
meet to trade. The NYSE and the Nasdaq are
the most important exchanges in the United
- Stock prices
change according to supply and demand. There
are many factors influencing prices, the
most important being earnings.
- There is
no consensus as to why stock prices move
the way they do.
- To buy stocks
you can either use a brokerage or a dividend
reinvestment plan (DRIP).
- Stock tables/quotes
actually aren't that hard to read once you
know what everything stands for!
- Bulls make
money, Bears make money, but Pigs get slaughtered!
Seems like we covered a lot. We hope that this
tutorial has given you a good idea of what stocks
are and how the stock market works.
1. If you think we missed something and
have a question, tell us about it.
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3. If you still aren't on our newsletter,
emphasize that this tutorial is meant to provide
a basic foundation for understanding. There
is plenty more to learn in the days, weeks,
and years ahead. Check out the links below for
more tutorials that build on your newfound knowledge.
Finally, if you think you know this stuff now
We hinted a few times in this
tutorial that there are many strategies for
finding a good stock.
are also other ways to trade stocks that we
didn't cover because we've got entire tutorials
devoted to the subjects.
have also already heard of mutual funds. These
are basically big baskets of stocks managed
by a professional. Mutuals can be a great way
for beginners to get involved in the market.
Picking stocks can be a daunting task. Fear
not! There is also a way to invest in the entire
market by using something called a stock index.
that you need a broker to trade stocks.