Stock Market & Analytics
Financial markets are the home base for investors who deal with assets like stocks, bonds, currencies (including crypto), commodities, and more. To track market movement, we use visuals called charts. Those are great to analyze past price patterns, identify trends, and make predictions about future price movements (read candlesticks, resistance levels). More than 65,000 stocks worldwide can be traded through brokerage firms. Some people may find themselves trading individual stocks on a daily basis, some prefer long-term investments.
The wide world of markets
The majority of us has heard the term Stock Market before. But what about the Foreign Exchange Market, Derivatives Market, Commodities Market, Cryptocurrency Market, and more? Those are other markets that investors use to add diversified assets to their portfolios.
Let’s focus on the stock market. The stock market acts as an online marketplace where individuals and businesses trade shares of publicly traded companies. So, a company offers shares or ownership to the public in exchange for money. Those act as securities as they have potential to grow and increase in value. Many trade those via Online Brokers.
Wall Street is home to the largest stock exchange in the U.S. is the New York Stock Exchange (NYSE). From Monday through Friday, from 9:30 a.m. until 4:00 p.m ET, traders from all over the world buy and sell their shares and hope to make a profit.
The Nasdaq is the second largest exchange in the U.S. Known for technology and innovation the NASDAQ is home to a lot of digital companies. Stocks listed on the Nasdaq are considered growth-oriented and more volatile. In contrast, companies that list on the NYSE are perceived as more stable and well-established.
Why are companies listed? – Companies want to raise capital, in other words, make money. When a company goes public through an initial public offering (IPO), it sells a portion of its ownership to investors in exchange for capital. This capital can then be used by the company to fund expansion, research and development, acquisitions, or other business activities.
How many shares do they offer? – The number of shares offered can vary based on the company’s valuation, the amount of capital it aims to raise, and the percentage of ownership the company is willing to dilute. IPOs typically range from small offerings of a few million shares to large offerings of tens or hundreds of millions of shares.
What’s in there for me? – If a company goes public and offers shares to the public, you may be interested in buying a portion of that company. That is only if you believe that the company will go up in value over time. Say, the share or portion was purchased at $10 at the time. After three years, the company established itself in a sweet spot with a new price per share of $120. The same share or portion we bought three years ago is now worth $120. We could sell it and make $110 profit. That’s the beauty of the stock market. If the company experiences a decline to, say $6 a share, that would mean that the investment of $10 is now worth $6. Prices rise and fall every day, it depends on how well we can predict those changes.
What can I do to not lose invested capital? -There is an inherent risk with any investment. To reduce the risk of making fatal decisions, be sure to be in a positive state of mind, know your market, and not let your emotions take over. Also, consult with your financial advisor who researches financial markets for a living. Making sense of the news and studying chart patterns will also help getting more comfortable and confident.
When looking for specific company names, we usually search the ticker symbol, which is pretty much just an abbreviation of the actual company’s name. In these examples, Tesla, Inc. is just $TSLA and JP Morgan Chase is just $JPM. Many use the $-sign before typing the ticker symbol but quite frankly it doesn’t matter. We use tradingview.com to find companies and their charts as well as other markets.
Fun Fact: According to the Washington Post, 61% of Americans have money sitting somewhere in stocks, mutual funds, IRA’s, or other financial instruments.
Disclaimer: This content is for informational purposes only and is not intended as financial advice. We try to provide accurate information on personal finance and investing, but it may not apply directly to your individual situation. We are not financial advisors and we recommend you consult with a financial professional before making any serious financial decisions. There are risks associated with any investment which include but are not limited to stocks, bonds, currencies, cryptocurrencies, as well as any other market or investment vehicle. For more Terms, click here.