Are you interested in stock market investing? Is this something you want to spend more time learning about in the future? Are you finally ready to take a step forward, such as by making your first investment?
When it comes to stock market investing, there is a lot you need to know. While you can’t expect to learn everything on day one, you’ll begin to pick up more information as you go along.
Your end goal is simple: to implement a stock market investing strategy that puts you on the path to generating a positive return on investment.
There are no guarantees when investing in the stock market, but you can absolutely make a few moves that put you in better position.
With this in mind, you should realize the importance of understanding a variety of stock market investing terms.
For example, there may come a point when you find yourself asking what is a covered call. In short, this is the sale of call options against shares of stock that the seller already owns or bought for that specific purpose.
This may not be something you focus on during the early days of making investments, but it could come into play at some point down the road.
Stock market investing terms 101
For the meantime, let’s examine some of the more basic terms associated with stock market investing:
- Averaging down. This is when you buy more of a stock as the price decrease, as to lower your average purchase price
- Bear market. You’ll hear this term when the market is in a downward trend. This is when stock prices are falling.
- Bull market. This is the opposite of a bear market, and comes into play during a prolonged period of increasing prices.
- Blue chip stocks. These are the stocks associated with industry leading companies. Think about names like Apple, GE, GM, and Microsoft.
- Broker. A person who has the power to buy or sell stocks on your behalf, all for a commission.
- Dividend. A portion of a company’s earnings that is paid back to shareholders.
- Exchange. This is the place where investments are traded, such as the Nasdaq and New York Stock Exchange.
- Initial public offering. Also known as an IPO, this is the first sale of a stock by a company to the public.
- Quote. This is simple: it’s nothing more than a stock’s current trading price.
- Stock symbol. This is a unique symbol associated with every publicly traded company. Apple, for example, is known as AAPL. Microsoft is known as MSFT.
These are just a few of the thousands of terms that you want to familiarize yourself with. While there are many others, these are perfect for people who are just getting started with stock market investing.
Do Your Research
Now that you better understand some of the most basic stock market terms, it’s time that you dig deeper. Remember this: the more research you do the easier it becomes to feel confident in every investment you make.
Many years ago, learning more about the stock market was a challenge. You had to rely heavily on newspapers, as well as information from other traders. This is no longer the case in today’s day and age, as you can now use the internet to find what you are looking for.
For instance, you can quickly look up any term that you don’t understand. You can also use the internet to stay current with news related to companies that you want to invest in.
You should never hesitate to add to your knowledge base. Even if something doesn’t pique your interest right now, you never know when the information could come in handy in the future.
These are the types of stock market terms that you need to understand. While they are basic in nature, you need the information to ensure that you are making informed and confident investing decisions.
There is a lot that goes into investing in the stock market, but you have what it takes to achieve a high level of success. These terms, among many others, will put your mind in the right place. From there, all you need is a strategy that allows you to reach your goals.
What are your thoughts on stock market investing? Do you understand these terms? Are there any others that you would like to share? Use the comment section below to share your advice and guidance with other investors.