Basic Information about Investing in Stocks

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First off, what are stocks?

-Stocks allow you to invest your money into a company, and allow you to own a small portion of that company called a "share" at a certain price. (The market price)

Stocks are a LONG-TERM game.

You would be surprised at how many people try to invest in stocks, thinking that it will get them rich quick.

You might not receive any form of significant return on certain stocks for days, months, or even years in some cases, depending on which stock you choose.

However, the stock market tends to rise in value over a longer period of time, even though individual stocks may fluctuate rapidly over the short term, especially in today's market.

What moves the price of a stock?

-Buyers and Sellers!

1)When there is a surplus of buyers, the stock price rises.

2)When there is a surplus of sellers, the stock price falls.

When you first start trading stocks, you will be filled with emotions so you must:

- Have a strategy that manages your risk

- Invest in companies that you actually know about.

Advantages

1)High liquidity
-You can buy and sell stocks at any time during market open.

2)Dividend Payouts:
-Many companies offer dividend paying stocks that pay you in a certain time frame, typically monthly or quarterly.

Disadvantages

1) Potential Loss

-You could potentially lose your entire investment if the company does poorly, or if the stock market crashes.

2)Capital

- You will need a good amount of capital in order to afford multiple shares of a certain company.

Summary

-Stocks are a great long-term investment
-Having a strategy is crucial
-Invest in companies that you know/use everyday.
-Stocks are one of the most highly liquid securities that you can trade on the market.