The Stock Market - A Brief Primer

By Cindy Crawfurde


For most people, the exchange is a frightening thought because they saw the terrible effects it can have when things go bad. Stock plummeted after Enron, and even when mergers are declared as with the case of Chase and Bank One, the exchange feels the effects. Even DuPont has seen its stock costs drop when negative information is publicised, so the stock market, for the most part, is a variable entity. How does a new financier avoid the pitfalls of the stock market Research is the only real way, and it's no ironclad guarantee.

That suggests before you invest, you adopt the habit or reading the NYSE and Dow reports in the daily papers as well as reading the business section of the paper for any reports which will affect the stock prices of a company you could be considering. Naturally, sadly , supply companies are always earning money, but they are doing it at the expense of customers like you and me. For a few individuals, investing in the electric or water company is the one place they feel safe, but with all of the alliances of electrical firms, that isn't even a very safe investment in the 21st Century.

A new financier has to do some heavy reading and studying before making an investment in the stock exchange. This isn't something that ought to be decided recklessly, but instead wants fully investigated over a period of time. In addition to following the present trends in the stock exchange, the potential investor wishes to also research past trends, and be certain to research far enough in the prior years to determine that the company stock is stable usually. This needs, as an enlightened guess, at least 5 years worth of study, perhaps more if time allows.

For those that have been in the working force for 1 or 2 years, the trend has been one of problems, and occasionally the most stable company has seen their stock plunge in occassions of recession or bad press. As well as checking the history of a company , and the stock market overall, a potential investor should check the trends of firms who've been involved in mergers to discover how their stock fared before the merger was published , later, during acquisition, and after purchase.

In fact , the aptitude for a company after a merger may be a negative one, so it is very important to know the way in which the backers and potential investors saw the power of the company. The cost of a companys stock is a measure of its strength in the economy, and without that, strength, the backers can force an unfriendly merger, whereby the backers take over the company. Once you have decided the safest investment for you to make, you want to choose a finance counsellor or broker. It isn't smart to try and make a direct buy because although it could be cheaper, the aid of a broker will forestall or lessen the financial loss in the eventuality of a drop in cost. A broker can see the trend and advise you to sell your stock in a fixed enterprise based on trends that are showing.

Unless you have learned a great deal about the stockmarket, there is not any way you, as a new investor, can forecast these things. The price you pay a broker for handling your account is worth the peace of mind you will have in knowing your money interests are uppermost in the mind of your broker. Even with retirement funds, if you happen to have any stocks in your portfolio, which most funds stockholders do, it?s important to have a broker who can move those stocks around in the event of a downward trend.




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