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The Stock Market – Becoming Familiar With the ‘Animals’

The Stock market is the economic backbone of America’s economy. Stocks or securities listings are traded either through exchanges or open markets every day.

The stock market – often referred to as the equity market – is the driving force behind America’s economy, serving as the key to many companies’ money raising or capital infusion strategies.

The market is divided in to two main sectors, the primary and secondary market. New stocks are offered at the primary market first. Later trading of the same stocks takes place on the secondary market.

Animal breeds are used to describe general market behavior, ranging from bulls to chickens. These animal nomenclatures are often used to differentiate situations and people that affect the market.

The Bull Market

A bull market occurs when people have capital to buy consumer products – stocks and the Gross Domestic Product (GDP) are both on the rise.

During bull markets the price of most stocks are on the rise. It can be the ideal time to buy a cheap stock and make a profit selling it later.

While bull markets are a great time to start investing, they simply do not last forever. Eventually, stocks become over valued and quickly lead to a slowdown in the market.

The bull nomenclature has left the halls of Wall Street and is used often in the public realm. People who believe that the market is strong and on an upswing will often be referred to as bulls.

The Bear Market

As mentioned above, when the market is on an upswing, it is called a bull market. However, when it is steadily heading in the opposite direction, this is referred to as a bear market. Bear markets are tough times for average investors to purchase a stock that will turn a profit.

During bear markets many brokers resort to alternative techniques such as “short selling” to make money.

Another strategy that tends to prevail in a bear market is to wait out the down side and hope for a return of the bull market. Investors who believe that market with start to sour are often called bears.

Cautious Investor

Cautious investors are often referred to as chickens. Chickens are afraid of losing money and often only invest in money markets, or stop investing all together.

The Big Loser

Investors who love high risk stocks and are not afraid of losing money are referred to as pigs. Pigs are often the investors who create the greatest profits for stockbrokers. They often look for the “big score” stocks, a stock they hope will have high profits. Such people often invest without doing thorough research and can lose significant sums of money if their investments turn sour.

With all the animals associated with the stock market, it can be tough to differentiate Wall Street from the Bronx Zoo.

Taking a Cautious Approach to the Stock Market

Investing in the stock market is a good way to (probably) increase your “disposable income.” For those unfamiliar with investing, playing the stock market may seem more like playing Russian roulette. It’s not, but perceptions…

Buying stocks means that you have a stake in the ownership of the company – albeit a very small stake. You are a partial ownership of the company. (“Hey, I own Hewlett-Packard!” Ok, maybe not quite.)

Why Should You Buy and Sell Stocks?

Your reason for investing must be decided by you. There are so many reasons why you might want to consider investing, but the final decision largely depends on your personal motivations – and inhibitions.

You might decide to invest to own a piece of a company. This will not get you total control over the company – not even close – but it does give you a degree of power in making some voting decisions about the company’s future.

Other people may opt to invest in companies they are personally drawn to. And probably for most, it’s all impersonally about which stocks they think are likely to result in the greatest bounty.

Choosing Your Stocks

With so many stocks types and prices to choose from, it is certainly understandable that your decision could be a difficult one. There are, however, some practical ways to narrow your decision. But if you are a relative beginner, you might not know what factors to base your investment decisions on.

Assuming there is nothing you find objectionable about a company you are considering an investment with, your main decision-making factor for selecting it needs to be your confidence in the ability of the stock to turn a profit – that is, good return on your investment.

Depending on your needs, you can look into stocks that are likely to be profitable in the short term or those that may take longer before you see any significant gains.

You also need to consider whether you want to buy many smaller, cheaper stocks, or fewer larger stocks. Again, this is a matter of personal preference.

Focus Broadly

Whatever you decide, diversify your portfolio. As the saying goes, do not put all your eggs in one basket. If the basket falls, all the egg crack. So spread your investment over several stocks in multiple sectors of the economy.

This ensures you will not be completely at a loss if one area of the economy crashes or if a company’s profits turn sour. You could lose a portion of your profits, but you will not lose the whole thing fell swoop.

Stock market investing is clearly not for everyone, but if you are at all interested in investing, it is worth a try. Before you actually take the plunge and purchase stocks, take some time to understand what you are doing. You can use Internet site, investment books, or even a financial planner to help guide you through the process.

Stock Market Tips For New Investors

The stock market is a lucrative area to make money in but only when you know what you are doing. So anyone who is planning to invest in the stock market needs to be sure of all the facts and details before any real investment is done.

Gathering information nowadays has become really easy and all you have to do is to get online and start searching. So for the basic information, you can visit quite a few websites that will tell you all about the stock market and how it works.

To give a very simplistic analogy, the stock market is like real estate. You buy a piece of land, it fluctuates in price and when it is higher than the price you paid for it, you can sell and make a profit. Of course, even in this solution lies a very basic difficulty and that is knowing when to sell and when not to.

The sad truth is that absolutely no one can predict the market with 100% accuracy. There are always guesses and second guesses. So when the value of a stock is rising and you are waiting to sell, beware that the stock might suddenly fall and you will lose out selling at the peak. On the other hand, if you sell to soon, you might regret it immediately when you see that you could’ve sold it for twice as much had you only waited a bit more.

There are several resources that are used by stock traders to keep track of their assets and keep track of the market in general. These include constant tracking of the stock market trends and utilizing software to keep track of the stocks that they have invested in.

Keeping an eye on the news is also important because the stock market is heavily influenced by the events of the real world and anything from a government change to a terrorist attack can severely affect the trends in the stock exchanges around the globe.

This is why you might notice that stock traders often obsessively keep track of the financial news TV channels to know exactly what is going and what the experts are saying. There are several famous analysts who are often featured on the TV and for novice and intermediate traders, listening to what they have to say about the industry might be very helpful.

So it may be clear from the description so far, maintaining an active stock market portfolio is no easy task. You have to keep track of the stock market at all times. You have to now what’s going on in real time. There are many websites that offer you each of these features separately, namely tracking software, articles for traders of all skill levels and financial TV. But there are only a few websites that can offer you an all-in-one solution for all your stock investment needs. These websites give you a complete solution to everything you need to keep track in an easily accessible package. You may be a novice or a veteran, you will still benefit from such a site.