Stock Market Investing As a Means of Securing Your Financial Future

You should frequently consider what you want your financial future to look like and then what to do with the money you have to get there. If you have available funds not required for month-to-month living expenses, consider investing some of it in the stock market. You then become an instant business owner – at least a very small part-owner.

The stock market is a great investment option for helping to secure your financial future. Granted, the latter part of the 21st century’s first decade was a stock market slaughter. However even the worst stock performances lend themselves to investment opportunities. You simply need to know what you’re doing.

Given that, you will need some means of earning money when you are too old to work or simply ready to retire. Buying and selling stock is an easy way to earn some money that you can set aside for the future. (Easy, not simple.)

Creating an Investment Portfolio for Retirement

Develop an investment portfolio that has diversity in the types of stocks you purchase. The old adage of not putting all your eggs in one basket is as true in the stock market as anywhere, especially if the profits you hope to earn are what you plan to live on when you retire.

Consider also purchase different valued stocks (some expensive, some cheap) and that they are not all in the same sector of the economy (e.g. manufacturing, technology, medicine, etc.).

If you were to invest in just one sector of the economy (say, technology), you would wind up in financial trouble if that sector began to “perform” poorly.

Additionally, evaluate the possibility of owning some non-stock market investments – for example, real estate or precious metals – rather than pouring all your money into the stock market.

You will want your stocks to be a mixture of short-term and long-term growth stocks as another way of ensuring your portfolio is diverse.

Investments to Survive Inflation

Resist the overly-cautious temptation to place all your money into risk-adverse investments such as CDs and mutual funds. If you do, in the long term, your net worth might be increasing at a rate that barely keeps up with – if not lags behind – the rate of inflation.

It’s certainly OK for a portion of your money to go into safer forms of investments, but if you don’t take at least some risk, you cannot expect much of a profit.

Trying to find a way to come out on top when investing during an economic recession or a period of high inflation can be difficult, but it’s far from impossible. You simply have to take some chances and make investments in companies that likely provide you a higher rate of return on your investment.

Investing money is a difficult decision because there are just so many options and success vs. failure possibilities. However, don’t allow yourself to become emotionally “paralyzed” by all the considerations.

Seek the advice of a professional broker to help create a portfolio that will lead you down a path to success which is comfortable with your available investment dollars, your personality, and your penchant for risk-taking.

Stock Market Terms and Jargon

Stock Market Terminology

We all are well aware about the fact that it’s a good practice to understand the basics of a field before entering into that particular field. So this time I have bring some basic Stock market terms and jargon which are used by those who are basically involved in stock market trading. Let’s have a look at these terms-

Stock market – A stock market is a place for trading of a company stocks and derivatives at an agreed price. In simple words we can say that stock market is the place where stocks are bought and sold.

Stock exchange- It facilitates trading for brokers and traders. A broker acts as a mediator between an exchange and a trader.

Stocks and shares- Stocks and shares are sometimes used interchangeably. Both of the terms refer to the share in the ownership of the company. The only difference is that stock is a general term describing the ownership certificate of any company while shares refers to the ownership certificate of a particular company i.e. if one says that he own stocks it refers to overall ownership in one or more companies but he says that he owns shares, It means he is referring to a particular company’s stocks.

Bull- The investors or trader who buys shares in the expectation that the Market price of the company’s share will increase.

Bear- A bear is the counterpart of the Bull. A bear sells stocks first at higher price and then purchases it at lower price to earn profit.

Bull market- When the market is rising and buyers are more than the sellers.

Bear market -Price of the securities falling for a prolonged period, the market is called bear market and this trend is called bearish.

Correction- A correction takes place when market indices rise rapidly for few days and then retrace these gains

Closing price-The last trading price of a security at the end of trading day.

Circuit breaker- When price of a stock increases or decreases by a certain percentage in a particular day, it hits the circuit breaker. When the stocks hits the circuit breaker, trading in that stock above (or below in case of decrement) is not allowed for that particular day.

Day trading or intraday trading- Day trading is buying and selling a security on the same day. In day trading the traders square off his or her position on the same day.

Long- If you buy a stock means you long the stock. Traders who thing that the price of security rise up, go for long.

Short- Short selling means selling of borrowed stock in a hope that the price will drop and then one will buy back it at cheaper rate.

Stop loss- Stop loss is used to limit the possible loss of trader. It’s a stock trading strategy to ensure that the trader will not incur huge loss. It suggests the traders to take off the positions when it hits the stop loss. A good stock advisory always provide stock tips along with the stop loss.

Tips For the Beginning Stock Market Investor

New to stock market investing – or just thinking about it? It used to be that investing in stocks was a pursuit for the well-heeled, but some changes to the stock market structure and a growing need for retirement planning have changed that completely. Today, stock investing is for everybody – a necessity to ensure a comfortable retirement, if not a way to get filthy rich.

Of course, if you’re actually going to make money investing in stocks, you can’t just go in blind and start buying stocks. The scary truth is that there are at least as many losers in the stock markets as there are winners. And despite the fact that we’re talking about winning and losing, stock market investing is not a game, and it’s not a gamble – or shouldn’t be. If you walk into it thinking of investing as ‘playing the market’, but don’t take the time to learn the rules and the tips and tricks of stock investing, you may be in for a sad awakening.

A stock investor needs to understand the market before investing.
Okay, that’s not an absolute given. If you can afford it, you can always hand your money over to an investment firm and let them take total control and make your investments for you. But for those people who would like to pick and choose their own stocks, a little homework is an absolute necessity.

You can find a lot of excellent tutorials with stock tips and tricks of the trade online. Learn the definitions and get a basic understanding of how the market works before sinking any money into a stock. Stock exchange terminology can be daunting – and not understanding the terms can cost you some serious money if you make a mistake, so before you start spending money, or even consider which stocks you should invest in, take the time to read up on the basics of investing in stocks.

Stock Analysis – How do you choose stocks?
While there are hundreds of trading “systems” out there, most savvy market investors use one of three methods to choose the stocks in which they invest – fundamental analysis, technical analysis or a blend of the two. The benefits of one over the other are a hotly debated topic in most forums devoted to stock market tips and stock market news, so understanding the differences and relative merits of each is important.

Fundamental analysts choose stocks on the strength of the company in which they are buying shares. Fundamental analysis is a valuable tool for choosing stocks for long term stock market investing.

Technical analysts use charts to look for patterns and signals to tell traders when to buy and sell stocks and other securities in order to maximize their profits. Technical analysis is most often used by traders, who buy and sell stocks in the shorter term rather than buying stocks as a long term investments.

Market Tools for Beginning Investors
Long gone are the days when the only way to get your stock market news was in the morning newspaper. The internet has made it possible – and easy – for anyone with a computer and an internet connection to get up to the second stock exchange quotes, follow your favorite stocks, research possible investment opportunities and get the stock market report on any stock that catches your eye. There are free and premium services that offer stock market quotes in real time – though most of the free services are delayed by twenty minutes or more. Many of these sites also let you pull up financial data, technical charts and company news on your chosen stocks, and will even point out stock picks and offer stock tips.

As a beginning investor, one of the best things that you can do is visit a wide number of stock market report sites, play with the tools offered and read up on tutorials that will help you get familiar with how the stock market and trading works. Once you have a solid grounding in the technical and how-to end of the stock market, you’ll be able to make far better decisions when it’s time to put your money to work.