Understanding the stock market can be a daunting task for any new investor. Not only are there many concepts and technical terms to figure out, but nearly everybody is trying to give you advice.
This can be overwhelming, especially when much of that advice seems to be conflicting. For example, as share prices fall, should you sell, hold steady, or average down? You will hear all three suggestions from different types of investors.
Should you have your long-term money sitting in stocks, which tend to outperform other assets over time, or should you keep cash on hand so that you can take advantage of any opportunities that arise? There will be investors that have made buckets of money with both strategies.
A PLACE TO START: TERMINOLOGY
While there is no shortage of websites and resources to learn about stock market basics, the first step for any beginner should be to talk the same language as the pros.
Today’s infographic comes to us from StocksToTrade.com, and it covers the most important stock market terms that every new investor should know and understand. It’s enough to get a beginner on the same playing field, so they can start to understand more complex concepts around markets and investing.
While we don’t agree with the exact definitions of all of the terms, the list is adequate enough to get any new investor off the ground. It covers basic order terms like “bid”, “ask”, and “volume”, but it also goes into concepts like “authorized shares”, “secondary offerings”, “yield”, and a security’s “moving average”.
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