"Introduction to the Stock Market: What Beginners Need to Know
How Does the Stock Market Work?
Stocks: When you buy a stock, you're purchasing a small ownership stake in a company. Stocks are traded on exchanges like the New York Stock Exchange (NYSE) or NASDAQ.
Price Determination: Stock prices fluctuate based on supply and demand. Factors influencing stock prices include company performance, economic conditions, and investor sentiment.
Investor Roles: Investors can be individuals, institutional investors (like mutual funds and pension funds), or traders who buy and sell stocks frequently to profit from short-term price movements.
Types of Stocks
Common Stocks: Represent ownership in a company with voting rights and potential dividends.
Preferred Stocks: Offer priority dividend payments but typically lack voting rights.
Investing Strategies
Long-Term Investing: Buy and hold stocks for an extended period to benefit from potential growth and dividends.
Value Investing: Seek undervalued stocks based on fundamental analysis of company finances.
Growth Investing: Target stocks with high potential for earnings growth, often in emerging industries.