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STOCK MARKET BASICS

"Investing in the stock market can be very rewarding-
prosperity follows those that are diligent"

We here at HowToStockMarket.net have come together because we share a common vision; to enlighten those who are in search of knowledge about the stock market or investing. We were once in your shoes and it took years to gather the knowledge necessary to feel comfortable trading in the stock market...alone. We are here to familiarize you with pertinent information before putting forth your hard earned money. Our website was created to help anyone interested in learning about stock, finance, and investing. We are here to serve as your number one financial education tool! We have spent hours upon hours laying out the following information in such a way that even someone who has zero knowledge about the stock market will leave feeling educated and ready to invest.

Whether you are here to learn about how the stock market works or what you should know before trading, you have come to the right spot. Please read further as the most important and exciting information is yet to come.

HOW TO INVEST

You are, undoubtedly, interested in learning the essentials of investing and you have come to the correct place! The primary goal of the how to invest page is to familiarize, educate, and provide general information to our visitors on how to invest in the stock market and other types of investment vehicles. The information here will help you better understand the stock market and all of its complexities in a concise manner. The how to invest page will provide helpful tools and information which will enable you to grow your hard earned money into a large wealth portfolio with the greatest possible returns. We will provide answers to such questions as: "why should I invest", "how much do I need to invest", "long term or short term investing", and "what type of investment vehicles are recommended for me?" This page will also include basic definitions, diversification suggestions, online brokerage choices, a Q&A section, and lots lots more!

EQUITY (STOCK) MARKET

Before jumping into the stock market you're asking yourself "what is stock?" Great question, stock simply refers to a percentage of ownership in a company. Companies generally sell stock so that they can get funds for improvements and advancements that will in turn make them more money. The stock market, on the other hand, is a general term for the where people meet to buy, sell and exchange stocks. Most people know what I am referring to here, center boards hanging with numbers rotating, changing from green to red and back to green. Hundreds of men and women in business suits yelling, waiving and using hand signals to signal trades. That is the stock market, also referred to as wall street. It is here that investors connect with traders to buy or sell shares of stock.

BOND MARKET

Bonds, interest rates, Federal Reserve policies, protecting your portfolio against fluctuations in stock market - this is the place to learn more about bonds and bond investing. The how to bonds market page will provide valuable bond market information, articles, guides, risk projections, ratings, and most importantly an overview of the most popular type of bonds traded in the United States. This page will cover everything you should know starting with bond basics and key bond investment considerations all the way through buying and selling bond strategies including mortgage-backed (MBS) and asset-backed (ABS) securities.




MUTUAL FUNDS

When you think about the phrase mutual fund I would assume that you just as most everyone else breaks it down and defines the words individually. Let's do so, the word mutual means to be shared or to have in common with, pertaining to a group of two or more. The word fund simply means a supply of money. When you combine the two you are left with a basic understanding. A mutual fund is a professionally managed collection of funds from investors that is used to purchase stocks, bonds, money market instruments as well as a few other securities. The mutual fund is accessible through a broker who then contacts the mutual fund company. The funds may be purchased once daily, at the end of the day after net asset value has been assessed.

Similar to any business you may take to the stock market there are advantages and disadvantages to placing your money in a mutual fund. In this section we go into detail and simplify the complexities that need to be known before jumping head first into a mutual fund.

ETF's

ETF is an acronym that stands for Exchange-Traded Fund and is another type of fund that is traded on the stock exchange, similar to stocks. The ETF's assets are held in stocks, bonds or commodities and the shares sell over the course of the day for a value close to its net asset value. ETFs are the most popular type of exchange traded product which may be because of the stock-like features, low costs and tax efficiency.

ETF's have been on the US market since 1993 and in Europe since 1999 and they became popular right away. They combine the feature of being a closed-end fund, which trades throughout the day, and that of a mutual fund because it can be bought at the end of the day for its net asset value. They are sought after and we will go into details about the differences between an ETF and other funds as well as all of the details necessary to be confident in trading ETF's.

OPTIONS

How to options will dive into another type of security, called options, which offer a world of opportunity to beginner and sophisticated investors alike. Options are described as a type of contract that gives a buyer the right to purchase or sell a security, such as stocks, at a fixed price within a specific period of time. The power of options lies in their versatility within a portfolio; they can be as conservative or as speculative as you see fit, their strategies are numerous, and their profits are exponential!

To help you along your path towards understanding the complex world of options, how to offers a comprehensive options trading educational page that will help you: learn and discover new options trading opportunities, profit from any market condition, diversify your investment portfolio, and secure your financial future. Continue on to see the advantageous qualities of options such as their flexibility, limited risk, gains leverage, and hedging!

WORLD MARKET

Emerging markets, China, India, Europe, Japan, Brazil, BRIC, all of these are key terms in international investing. It has been proven that the main reasons why people invest in the world market are for growth and diversification within their portfolios. When an investor is trying to grow their wealth, it is highly recommended by many professional and highly successful money managers that 10% to 20% of assets be apportioned internationally. Investors have reaped enormous returns from countries like China, up 69% in 2009 alone; Brazil, up 31% in 2009; and India up 43% in 2010. Profits and wealth growth in these countries were made available by investment vehicles such as: foreign stocks, foreign options, global funds, international funds, country funds, and international index funds. How to will be your travel guide through the international avenues of world market investing!

FOREX TRADE

Forex is an abbreviation for Foreign Exchange market, also known as the currency market. This is how we determine a relative value of different currencies from around the globe. The main purpose of the forex market is to assist with international trade by allowing companies in different countries to purchase goods or services from another country and pay/get paid in the currency of one another.

This is a unique market that originated in the 1970's because of government restrictions on foreign exchange transactions. Its uniqueness is discussed further, along with the basics you should know before trading in the foreign exchange market in this section.

FUTURES

In finance, futures are standardized contracts between parties which are made in order to exchange certain agreed upon assets of quantity and quality for a specified price with the delivery occurring on a specified date. The specified price is the future's strike price and the specified date is the future's delivery date. The buyer in this type of transaction is considered to be long the contract while the seller is said to be short. In many cases futures can be traded on many different types of underlying assets such as: Financial futures - securities, stock indices, interest rates, currencies and Commodity futures - corn, soybeans, crude oil, gold, silver, etc. Futures are traded on exchanges, and the main purpose of the exchange institution is merely to act as an intermediary between the two parties and minimize the risk of default. If you think that futures seem similar to options, you are correct in seeing the similarities. A key note, and major difference between the two is, options come with rights to buy and/or purchase while futures maintain that both buyer and seller must fulfill the contract terms on delivery date.

Summarizing futures simply cannot be done with a paragraph or two of text so please continue on to our how to futures page to begin your learning experience. Many of our experts are well versed in the futures arena and expand on it further in their programs as well!

CHARTS

Stock charts provide an attempt to forecast stock prices on the basis of marketed-derived data. Investors who tend to look at charts will use volume, price, and psychological indicators over time. They are looking for patterns and trends in the data that indicate future price movements. The key to gaining success from reading stock charts properly lies in the ability to be persistent and open minded. Once you have gained the ability to read the charts, you can use proper market timing to increase your profits significantly. In this section you will find all of the need to knows on how to read charts, which charts to look at for specific information, market analysis, historical charts, POP charts, pattern trading, buy and sell signals, technical setups and trading in real time.

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