Getting to Grips With Stock Market Basics
Stocks: chances are that you’ve heard of the term. But it’s also likely that you have never actively engaged with them. Why? Well, the majority of us associate the stock market with the one that is presented to use through popular media. We imagine well suited brokers running around high-end commercial properties, shouting figures down their phones and celebrating when they achieve something. But this isn’t necessarily the case in real life. Believe it or not, almost anyone can engage with stocks. All you need is a bit of basic knowledge and the spare time to monitor changes in the market. Let’s learn more about this now!
What Are Stocks?
We hear the term “stocks” thrown about so frequently that many of us accept the term without actually understanding the concept behind it. So, what actually are stocks? Well, when you buy a stock, you purchase a share of a given company. If you purchase dividend stocks, you receive a share of the given company’s profits as they make money. Ideally, you want to buy stocks at a low price, then see the company expand and succeed, then sell up as the company (and thus your share in the company) gains value.
When you engage with the stock market, you’re going to need some sort of strategy at hand. Playing this strategy should help you to make as much profit as possible. So, let’s start out with covered calls. Covered calls are a neutral strategy in which you only expect a small difference in stock prices, so is best for those who are in stocks for the long haul. However, this slow but steady strategy allows you to earn an income from the premium! For more information on this area of the stock market, have a read through covered calls for dummies. This will give you a more broad and in-depth knowledge of the subject!
Practice Makes Perfect
If you’re feeling a little hesitant about putting money straight into the market, don’t worry. There are plenty of people in the same boat as you. But the market caters for this! You can give yourself a little experience through the use of stock simulators. These are online simulators that allow you to engage in the real stock market in real time, but you only invest with fake money. You get to engage with stocks and shares without risking losing any money. This gives you the best opportunity to train yourself and familiarise yourself with the process before putting any real money down. Perhaps the best simulator out there is Investopedia, which tracks your portfolio, gives you your trade options, monitors your short stock, helps you to place market orders, and limit orders.
As you can see, stocks are actually surprisingly accessible, even if you have no prior experience in the area. You can even try your hand at them without investing any real money, so you have little excuse to not get involved to some extent!