Stock Market Investing: The New Ultimate Step By Step Guide To Making Money By Investing & Trading In The Stock Market by J.F. Thompson by J.F. Thompson - Read Online

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Stock Market Investing - J.F. Thompson

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Introduction

Congratulations for downloading the book, Stock Market Investing: The New Ultimate Step By Step Guide to Making Money by Investing & Trading in the Stock Market.

The following sections will discuss what you need to know in order to start investing in the stock market successfully, regardless of whether you are looking to invest $10 or $100,000. 

Investing in the stock market successfully is all about learning as much as possible before you make a move which is why the first thing you will learn about in the following chapters will be the basic facts about the stock market and stocks in general, as well as the forces that control them. Next, you will learn all about the type of mindset you will need to cultivate in order to trade successfully, as well as how to create a personalized investment plan that you can count on.

From there, you will read about rules in the stock market. Finally, you will find a number of different strategies to consider along with tips and trick and mistakes to avoid, ensuring you start off on the right foot. 

Read on to enjoy. 

Chapter 1: What Do You Understand About Stocks

With traditional job security becoming more and more of a distant memory with each passing year, more and more people are considering other ways to ensure they will have a comfortable life when the time comes to retire. The most popular means of making this dream a reality is participation in the stock market which is why it is a recommended core component of any portfolio regardless if the goal is short or long-term wealth. 

While the stock market is likely something that you have been aware of practically your entire life, if you are like most people then you have never really given much thought to the specifics of stocks. As such, the best place to start is with the explanation of the reasons why stocks even exist in the first place. For starters, companies issue stock for one reason and one reason only, as a way to raise capital. Issuing the first round of stock is a company's ownership deciding to cede a portion of the control of their company to outsiders as a way of raising capital for future growth. Issuing stock is what is known as ‘equity financing.’ While the company is giving up a specific share of ownership in the company, in return they gain access to a source of revenue that they do not need to worry about paying back. Initial shareholders who buy into unproven companies are taking a risk that the stock will be worth more than what they are buying in for in return for potentially lucrative rewards if the initial stock evaluation is especially favorable. The first time that a company decides to sell a portion of its stock is referred to as an ‘initial public offering.’

At a fundamental level, one share of stock is considered a physical representation of a claim on a portion of a company's assets and earnings. The more shares of a company's stock that are currently on the market, the less each share is going to be worth. The more shares of a particular company that an individual owns, the more control they are said to have over the company as a whole. Stock can also be known as shares or equity, and those people that own the stock of a particular company are known as its ‘shareholders’ which literally means they get to share in the company's profits. Sometimes, though not always, owning stock in a company will also provide the owner with the ability to vote on issues during an annual shareholder's meeting whenever a major decision has to be made.  

While during the early days of the stock market, each transaction came with an actual piece of paper indicating the details of the trade in question, these days any and all ownership information is stored electronically by brokerages that are connected to one another around the world. While owning shares of a company entitles you to a share of their profits, and possibly voting rights, this does not mean that you are going to have an active say in running the company, unless you own a vast majority of all available shares. Typically, shareholder influence is limited to voting for board members and thus indicating a general satisfaction or disapproval of the way the company is currently operating.

WHAT ARE STOCKS?

Simply, stocks are a type of security that represents ownership