The Stock Market for Beginners

Initially, many are intimidated when approaching the stock market. It appears to be a jumble of numbers, symbols and figures. However, a little study and practice will show that it is actually quite simple. There are many good resources on the stock market for beginners.

The first basic concept to understand is what the stock market is. It is actually just a glorified online market very similar to those used by many of you to buy and sell baseball cards. But, instead of cards or trinkets, it is a market for pieces of companies.

A stock represents a share in a given company. When you buy a share of stock you are in essence becoming a part owner of that corporation. There are many different styles participants use when approaching the market.

Some are long term investors. They seek to buy shares in companies the view have great prospects well into the future. They then intend to hold these shares for many years. The most well known investor of this style is Warren Buffett.

Others buy shares with an eye to holding them for shorter periods of time, most usually six months to a year. They seek opportunities where they think the company can do well in the near interim, but don't have the patience to wait many years for a good return.

The most hyperactive traders are commonly referred to as daytraders. This strategy really doesn't look at the underlying prospects of the company at all. Short term traders primarily use what is called technical analysis to attempt to predict where a given stock might go in the next hour.

This is often quite difficult to accomplish. Technical analysis uses charts reflecting the stock's past performance in an attempt to divine where it will go next. This is a difficult art requiring many years of practice. Some swear by it, others term in voodoo.

The other way of analyzing a stock's prospects is called fundamental analysis. This looks at the actual company, its products, sales and other real metrics measuring success. Long term investors pay close attention to these figures and generally ignore short term swings in the stock. Whichever style you decide best suits you, do your research first and be an educated player. The stock market for beginners can be exciting and profitable.

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