Stock Market is one of the main sources to grow your wealth and invest in for the long run.
So, let’s continue to discuss some more and understand the basic concepts. The stock market has had an average return of 11% per year, over the last >50 years.
Two commonly used terminologies that exist in stock markets:
Bulland Bear market.
Bear Market is when you are pessimistic. You think that the market isgoing to crash and one should not invest in it. This is generally a short-termphenomenon.
A Bull Market is when you are optimistic. You think the market is most likely to go up and that it will continue to do good. Generally, the market is always a bull market in thelong run.
Moreover, it is frequently asked by investors if they can buy stocks of every singlecompany that they know of. The answer is no because some companies are private, and not publically traded.
What is a Private and Public company?Private - Shares are not available on stock markets and the companies don’t reveal about its financial statements. Public - Shares are offered through IPO initially, and are available for trading in the market. They are required to file quarterly financial reports with the Exchange Foreign Commissioners and these reports are available to the public and shareholders.
After understanding the basics, there are few things to keep in mind while investing:
Keep the trade fee of less than 2% of the purchase price. To lower your commission, invest more. Even small investments have good returns in stock markets because of the avg. rate of return.
When investing in the market, newbies generally make mistakes. Below are a few common mistakes you should avoid:
1. Building wealth takes time. Be patient! The Stock prices vary and it takes time to getbetter returns
2. Do not take anyone’s opinion on investing. Always do your own research.
3. Not starting at an earlier age.
4. Investing too conservatively: Don’t fear, be optimistic
5. Not diversifying enough.
6. Concentrating too much on the share price
7. Investing in something that you never understand
8. Taking debt to invest
Final Note:A misconception in a stock market is that only the rich can invest. You can invest with even less than $50. Evaluate your options wisely and then make your decision.