Introduction:
Wouldn't you love to be a business owner without ever having to show
up at work? Imagine if you could sit back, watch your company grow,
and collect the dividend checks as the money rolls in! This situation
might sound like a pipe dream, but it's closer to reality than you
might think.
As you've probably guessed, we're talking about owning stocks.
This fabulous category of financial instruments is, without a doubt,
one of the greatest tools ever invented for building wealth. Stocks
are a part, if not the cornerstone, of nearly any investment portfolio.
When you start on your road to financial freedom, you need to have
a solid understanding of stocks and how they trade on the stock
market.
Over the last few decades, the average person's interest in the
stock market has grown exponentially. What was once a toy of the
rich has now turned into the vehicle of choice for growing wealth.
This demand coupled with advances in trading technology has opened
up the markets so that nowadays nearly anybody can own stocks.
Despite their popularity, however, most people don't fully understand
stocks. Much is learned from conversations around the water cooler
with others who also don't know what they're talking about. Chances
are you've already heard people say things like, "Bob's cousin
made a killing in XYZ company, and now he's got another hot tip..."
or "Watch out with stocks--you can lose your shirt in a matter
of days!" So much of this misinformation is based on a get-rich-quick
mentality, which was especially prevalent during the amazing dotcom
market in the late '90s. People thought that stocks were the magic
answer to instant wealth with no risk. The ensuing dotcom crash
proved that this is not the case. Stocks can (and do) create massive
amounts of wealth, but they aren't without risks. The only solution
to this is education. The key to protecting yourself in the stock
market is to understand where you are putting your money.
It is for this reason that we've created this tutorial: to provide
the foundation you need to make investment decisions yourself. We'll
start by explaining what a stock is and the different types of stock,
and then we'll talk about how they are traded, what causes prices
to change, how you buy stocks and much more.