The ABCs of the Stock Market

The ABCs of the Stock Market

A recent study indicates that Americans are saving less these
days than they were 10 years ago, except for entrepreneurs and
corporate executive and in one particular segment - young
middle-managers who are about six to 10 years into their
careers and only beginning to make headway into the higher
echelons of their particular industry.

Are you one of these people? If you are, then chances are that
you are currently in the process of planning or expanding your
base of investments. You have probably given real estate a good
look and determined that, although attractive, it is more ideal
for a full-time real estate investor because it demands a lot
of effort and time. You also probably have a tidy little sum
invested in various banking tools like savings and time
deposits as well as common trust bonds and government
securities. That's all well and good and your money is safe
right there. But now you want to shoot for the moon, mainly by
investing in the kind of company and industry that you may be
familiar with. You are eager to try the stock market.

Here are a few basics about the stock market business.

The stock market is mainly a place where you sell or trade a
company's stock. These stocks are small shares in the company
which it sells to the public in order to raise capital to
finance its other ventures. Of course, you already know that
capital is the money that a company spends for producing,
improving, expanding, distributing and promoting its products
and services. If you buy a company's stocks, you are one of its
shareholders.

The use of the term stock market also applies in reference to
all the stocks that are available for trading (as well as other
securities) as in the statement "the stock market performed well
today."

You can also trade bonds on the stock market. Bonds are a
business IOU that indicate that the bond issuer holds the bond
holder a debt. Bonds are traded directly between two parties
over the counter.

You may opt to trade commodities on the stock market. The term
commodities refers to agricultural products (coffee, sugar,
wheat, maize, barley, cocoa, milk products) and other raw
materials (pork bellies, oil, metals). For example, if you feel
that the price of coffee will increase next month, you buy the
coffee commodity now and reap the benefits of the price
increase next month when you sell.


About The Author: Jonathon Hardcastle writes articles for
http://4investing.net/ - In addition, Jonathon also writes
articles for http://4businesstalk.com/ and
http://ifinancecentral.com/

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