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Related Reading
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 Getting
Started in Stocks
Thinking of getting your feet wet in the stock market, but
don't know where to begin? Perhaps you've already taken the
plunge but would like to know more about the stock and mutual
fund investments you've made? Tens of thousands of investors
already know, the place to start is this best-selling guide
by Alvin D. Hall
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The Wily Beat
on Wall Street
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Ever wondered about this Stanlard
N. Poor guy the news is always talking about? Or why
he's continuously trying to saddle some sort of mystical
animal with the head of a bull
and the body of a bear?
If so, then like me, you have never been introduced to
the
concepts of the stock market. This quick review will
teach you the basics that'll soon have you predicting
pork belly futures like Eddie
Murphy.
Stock What? When you buy stock, you are not buying
any physical object. You are instead purchasing a claim
to partial ownership in a company, from its equipment
to its profits.
Corporations
sell stock because they need capital to invest in
the company. As a buyer, you agree to give them money
hoping to reap dividends
in the future.
A Little Stock Boutique Around the Corner The image
we commonly associate with the stock market is the sales
floor hysteria on Wall
Street. But be it in New York or in Albuquerque, the
market's main function is to allow buyers and sellers
to meet.
The three largest stock rendezvous points in the United
States are the New
York Stock Exchange (NYSE), the American
Stock Exchange(AMEX), and NASDAQ.
Loading Your Dice For the Stock Market Craps Shoot
With just a trusted
stockbroker's phone number you too can become player.
Now, the most common form of exchanging
stocks is called selling long. You buy stock at a set
price and only make a profit if and when you sell the
shares
at a higher price.
On the other hand, if you're selling
short, you count on the stock price going down. After
borrowing (NOT buying) stock from your broker, you sell
it at its set price, say $100. Since you still owe your
broker the borrowed shares, you can only reap a profit
if you buy the stock back at a lower price. Now if you
buy them at $50 and return the shares to your broker,
you've profited $50 per share.
No Time, No Patience, No Clue! Many people decide
that they just can't devote themselves to the stock market,
choosing instead to invest in mutual
funds. Mutual funds pool the money of investors, let
professionals scrutinize the market, and then buy the
best shares with that money.
Written by Jorge Aguilar
Have any questions about the
stock market? E-mail
us!
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On the Web
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Ameritrade
Education Center: Stocks
Investopedia.com:
Stock Basics
Thinkquest:
the Stock Market
Equity Analytics: Stock Market Resource Center
ABC
News.com: A Beginner's Guide to Investing
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Glossary of Terms
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Become a stock market pro by learning the
unique dialect of those sleek, motormouth stock brokers. Here's
a list of commonly used terms.
Blue chip company refers to large established corporations
whose stock is considered to be less risky than most. Blue
chip companies include Microsoft, Coca-Cola, and Wal-Mart.
Penny stocks or microcaps are the opposite of blue
chips. Their stocks sell cheap but are very high risk.
IPO stands for: initial
public offering. Offered when a company first goes public,
this can generate a quick profit if the company gets hot.
The Dow Jones Industrial Average (DJIA) is the number
usually shown in the news as either going up or going down.
It's measured by averaging how 30 of the top blue-chip companies
are doing in the market. The Dow
Jones closed with it all-time high of 11,722 on January
14, 2000. It currently hovers around 8,000.
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How
Wall Street Works