Quick Intro on Investing in Stocks
What is a Stock?
It’s a piece of ownership of a public company. You can own one share or one billion, that really depends on your goals and finances.
For instance, you’ve always wanted to own a store like Whole Foods, but can’t afford to get the real deal. You certainly can afford to buy 10, 100, 1000 shares. The decisions of which products go on the stands will probably make someone else, but you do have a say in the corporate aspect of it. But, you are technically part owner and can participate in the shareholder’s meetings as well.
Recommended Read: What is Short Sale Restriction?
There are two ways to buy stocks:
1. IPO – initial public offering. This is when the company first goes public. Not always is getting in on this level as great as some people believe they are. For one thing, you have to have a certain amount to enter – sometimes up to several million $. And there have been times that the IPO price was way overvalued and after the IPO period was over the prices fell down. This is done only on the primary market.
2. Open market – Secondary market. Once the company goes through the IPO and it’s complete it goes to the secondary market where it’s life continues to thrive through active buying and selling. This is how most investors work with stocks.
Once it’s on the secondary market you can trade on one of these stock market exchanges:
- New York Stock Exchange (NYSE)
- American Stock Exchange (AMEX)
- National Association of Securities Dealers Automated Quotations (NASDAQ)
Related Read: Different Types of Investment
How to Start
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