Stock Market: The Basics
By: Rui Carvalho
Tags: Stock Market, Investment, Investing, Personal Finance

Disclaimer: these are my notes on how I personally plan to make money in the stock market. I’m not a certified financial advisor and this article is not financial advice.

Watching the numbers roll by on the bottom of your screen during a news cast might seem like nonsense to you. Those numbers are very important to many people because they make their fortune with stocks. They steadfastly watch the stock markets wanting to see how their investment is doing.

To understand the stock market you first need to understand what stocks are. In a simple manner, stocks are the capital raised by a company when they sell shares. Shares are offered through the stock market and the money taken in from those becomes the companys stocks.

There are several major stock exchanges in the world where shares are traded. Companys stocks are increased and decreased each day.

One of these stock markets is the NASDAQ. NASDAQ stands for National Association of Securities Dealers Automated Quotations. The NASDAQ is a United States based stock market. Its the worlds first electronic based stock market. It also trades more shares each day than any other stock market which means it has the most impact on stocks.

Another large stock market that is United States based is the Dow Jones Industrial Average. You might hear someone say that the Dow is up or down this is what they are referring to. Many stocks are introduced on the Dow.

Many other countries also have a great impact on stocks. In Europe almost each country has their own stock market this includes Portugal, Germany, Spain, Holland Etc. The people living and working there follow invest in the stock market there and just like in North America the stocks rise and fall.

The people who handle the buying and trading are called stock brokers. Their job is to sell and trade the shares that their clients request. Its a demanding and rewarding job being involved directly in stocks this way. Stock brokers can make a lucrative income and the ones that study the markets and understand all the ups and downs have a definite advantage.

For the everyday person to get involved in stocks they need to do a bit of research. It might be wise if a large amount of money is involved to talk to a stock broker. Their job is related to stocks and no one is better qualified to assist you.

Stock brokers are paid on commission and therefore their drive is to invest in shares that will ultimately turn a profit. Often a stock broker has extensive knowledge with just a few stocks and he concentrates on those. If you decide to invest in a share that a certain stock broker is very well versed in, it might be prudent to have him or her handle your dealings. They can offer the best advice as to when to buy and when to sell.

There are other avenues available for people interested in stocks and thats the online stock trading companies. Many of these companies allow anyone to sign up and buy and trade their own shares. This can be a great way for someone to be introduced to the world of stocks and with some research and practice they can make themselves a profit. This is also a good way to trade in different markets and locations. The online Broker platforms are also more affordable to operate.