How to Get Smart About the Stock Market
The stock market can have big implications on world events and your own finances, but many investors find it overly complex and cumbersome. Increasing your knowledge of the stock market can help you better understand its impacts, but how do you get started? Consider taking the following steps.
Study common investment terminology. The stock market is rife with complex concepts, so start by getting a grasp of the frequently used terms. First, it helps to understand what all the abbreviations stand for, from NASDAQ to NYSE and beyond. To break it all down, use an online investment dictionary that provides plain-English definitions of common investment terms, or ask your financial advisor to explain them to you.
Enroll in a class. Take advantage of free webinars, seminars or workshops on investing fundamentals. If you prefer learning in a classroom setting, look for basic courses on investing, how the stock market works or personal finance at a local college or university.
Follow the news. Start following the business and financial sections of your favorite media outlet to get a healthy dose of investment know-how. You’ll begin to understand the types of business activities that influence the marketplace-for example, oil prices or new housing starts-and gain an appreciation for what’s considered newsworthy. As you become more attuned to global markets, you’ll start to see the ripple effect of mergers and acquisitions, product innovations and even front-page news stories-from natural disasters to general elections and terrorist events-on Wall Street confidence.
Watch investment programs. Public radio and television stations often feature investment programs aimed at new and seasoned investors. Even your local news channels may include a market segment. Be wary of infomercials disguised as informational investment programs, though.
Check out stock market apps. There are hundreds of apps available today focused on helping consumers understand investing. Have financially-savvy friends? Ask what apps they use to keep up on the stock market. Before downloading an app, check the reviews and opt for those that have been vetted by trusted sources.
Track your favorite companies. To better understand the movement of individual stocks, pick several of your favorite publicly traded companies to follow. Then, check their stock price, company newsroom and social media accounts each day. Tracking the stocks over time will help you understand how company announcements and actions, such as a product launch or comment by an executive, may affect the stock price.
Work with a financial professional. A professional can help you understand your investment options, and help you make financial decisions that are best for your individual needs. Work with someone who is willing to explain investment concepts and provide educational materials. Tell your professional about your desire to learn more about the market. He or she will likely be willing to send you news articles, add you to a newsletter or give you a call to discuss market news that may interest you.