The Stock Market for Beginners: Your Step-by-Step Guide
The Stock Market for Beginners: Your Step-by-Step Guide: - Mastering Stock Terminology and Investment Strategies
A Small Part of The Article for The Introduction of "The Stock Market for Beginners: Your Step-by-Step Guide - Mastering Stock Terminology and Investment Strategies" (ebook)
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Index
Description....8
The Stock Market is a Proven Way to Grow...8
The Average Annual Stock Markets Performance...9
Here are the median home prices in the past...10
The reason why Financial assets such as:...11
Now let's proceed...11
What are ‘stocks’? ...12
How to invest in stocks?...13
So you open up an account...14
So you want to buy stocks in good companies...14
How to sell stock...15
Buy and Hold ...17
Traders...17
Speculators...18
people speculated on stocks and lost a lot of money...19
Dividend Investors...19
passive income ...20
The pros and cons....20
Now in the stock market...23
Option number two ...23
What is an index ...24
Passive investing ...28
From 2001 to 2016...29
Diversification...29
The pros and cons...30
The Drawbacks...30
Now let me answer some really good commonly asked questions about index funds...36
How do you invest in index funds? ...37
How much money do you need to invest in index funds? ...37
How many index funds should you own? ...38
You can successfully ....38
You can think of it like this...40
With an ETF an exchange-traded fund ...41
Both an index fund and ETF offer you: ..42
The four biggest differences between an index fund and ETF are ..43
Liquidity...43
Minimum investment requirements...44
Expenses and fees...44
Taxation ...45
With an ETF you're selling to another buyer...46
The sale ...46
The index fund was created by John Bogle...47
The first ETF...48
The terminology and you know how to read stocks ...51
Next segment you're going to learn
10 Common terms that every beginner in the stock market should know....69
1. Bull Market ...70
2. Quantitative Easing...70
3. Bare Markets ....71
4. Shorting ...71
5. Quantitative Tightening...72
6. We Have Dead Cat Bounce ...73
7. Don't Fight The Fed...75
8. Dollar Cost Averaging ...76
9. Tax Loss Harvesting ....78
10. Support and Resistance...78
Now let me tell you how to find good stocks to buy ...79
You can find Stocks by reading financial news outlets ...80
Step number two doing your research...81
Now let me give you my honest opinion about where ...83
They're Exceptions...84
Stock Market Taxes...85
Let's start with the basics...86
Let's say that it's December 31st...87
You're most likely going to get your ...88
Let me give you an example to clarify...91
How much will you pay in taxes...91
Now here's what you must know to save yourself a lot in taxes....92
it just depends on how long you hold...93
let me explain...95
Let me explain so ...95
Let's say that it's next year so now we're in 2021...96
Then let's say that we're now in the year 2022...96
Now let's talk about ...97
Example Number One You Work a Job...98
Do you know what the tax consequence ...99
Example Number Two...99
you make $100,000 a taxable income at your job...100
Example Number Three ...100
There's a rule that limits your losses per year...101
Now I have to clarify this...102
Now let's cover your tax obligation on your dividend income and your interest income ...103
Just for your information ...104
Here's a little extra information...106
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Description:
Discover the secrets of the stock market with "The Stock Market for Beginners," your ultimate guide to understanding and navigating the world of stocks. This comprehensive book simplifies complex concepts into clear, actionable steps, making it ideal for newcomers eager to begin their investment journey. From understanding essential stock market terms to identifying promising stocks and creating strategies to minimize losses, this guide covers it all. With real-world examples and practical tips, you'll gain the confidence and knowledge to make informed investment decisions and achieve your financial goals.
I want to welcome you to the Stock Market for Beginners Ultimate Guide if you're new to the stock market then this Book will be perfect for you so I want you to know that every experienced investor in stocks was once a beginner so it is an honor to guide you in your stock market journey to help you achieve financial success and Financial Freedom now let's begin so here is what we're going to cover in today's stock market for beginners you are not expected to absorb all this information in one sitting so Read this book at your own comfortable pace so let's begin with this you should invest into the stock market
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The Stock Market is a Proven Way to Grow
because it is a proven way to grow your wealth just look at the historical data these are
The Average Annual Stock Markets Performance
the average annual returns that investors make in the stock markets in
- the past 30 years the stock market has gone up by an average of 99. 9% a year if you look at
- the past 50 years it's 10. 8% a year in
- the past 100 years an average annual return of 10. 5%
a year but I'm going to tell you this
because I want to be upfront with you yes there are stock market crashes but over time the stock market recovers and essentially the stock market keeps going up it's it's like home prices generally real estate tends to increase in value so you know this but I want to I want to make this clear so
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Here are the median home prices in the past
- 100 years ago a home cost this is the median price $3,200
- 50 years ago you could buy a home the median home for $33,000
- 30 years ago the median home price was $126,000 and
- today the median home costs approximately $400,000
so it just keeps going up and it's the same thing with the stock markets
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The reason why Financial assets such as:
Properties or stocks continue going up is partly because of inflation however the stock market does outpace inflation But ultimately you want to put your money to work by investing it and the stock market has a proven track record of growing your money
Now let's proceed
you must understand how this stock market works I don't want you to throw your money in stocks into the stock market if you don't understand the basics so in this section let me explain to you
- what are stocks.
- how to invest in stocks?
- how people get Wealthy by investing in the stock market? and
- what stocks are best for beginners.
so
I want you to know that the stock market is very simple so let me explain to you
What are ‘stocks’?
so let's just say that you own a business and so you're a business owner and let's say that you want to raise a lot of money for your business to grow and expand so what do you need to do you need to find investors and a great place to find investors is in the stock market now in order for you to raise a lot of money for your company you need to sell a portion of your ownership in your company to investors and that's what stocks are stocks are just units of ownership in a company so if you buy stock in apple or Microsoft or Tesla you are an owner of the company so you probably own a very small piece of the company but you are still technically an owner therefore one person does not own apple or Microsoft or Tesla so thousands of people own stock in those companies so those companies have thousands of owners which are the stockholders now let me tell you
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How to invest in stocks?
so the stock market is a big marketplace where you go to buy and sell stocks to participate in the stock market you need an online brokerage account so there are a lot of online brokerage accounts to choose from
to some online brokerage accounts that are offering signup bonuses with zero fees and there's no catch it will cost you nothing some of these signup bonuses can be substantial so please be sure to check them out
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So you open up an account
bank account —----- brokerage account
and then you transfer money from your bank account to your brokerage account and then you're going to have money in your brokerage account accounts and then you're going to be ready to buy stocks
So you want to buy stocks in good companies
that's because if a company does well then the value of the company increases if the value of the company increases then the price of your stock goes up and then many cases if a company is making a lot of profits the company will take those profits and pay a dividend to whoever owns the stock so you don't have to do anything to collect a dividend it just gets deposited into your accounts which is pretty awesome aome so this is passive income in its truest form now if you want to sell your stocks it's very easy so
How to sell stock
you may want to sell your stocks for whatever reason such as:
you just want to cash out maybe you don't like the company anymore maybe you want to sell your stock to have money to buy a different stock so you're free to do as you please and again this is all free no fees zero commissions so when you sell your stocks you'll have money in your brokerage accounts because again you your stocks and whenever you want you can transfer that money back to your bank accounts or you can let that money just sit there some brokerage accounts pay you interest on the money sitting in your accounts or you can use that money to buy stocks you know whatever you want now I want you to know that many people get wealthy in the stock markets and there's not just
one way to do it I'm going to tell what most people do and you can try to see which style is most appealing to you bu
- Buy and Hold
- dividend investor
- Speculator
- Trader
and let me explain these styles to you
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Buy and Hold
some people just buy stocks and they just hold on to them for a very long time we're talking about years even decades some people they'll even hold on to their stocks until they die and they'll put it in their will so this is a set it and forget it approach
Traders
some people in the stock market will try to buy and sell buy and sell frequently and make some money these people are known as Traders who are not interested in holding a stock for the long run and watching the company grow so I would recommend that beginners in the stock market so if you're a beginner please refrain from Trading with a large amount of money I would recommend that you get some practice in first but it's true many professionals get rich by trading but that comes with experience
Speculators
some people buy smaller riskier stocks that have a lot of potential and could Skyrocket in price so these are speculators I'm not saying that in a good way or a bad way people speculated on Tesla early on and made a lot of money so you could say the same thing for Amazon or Walmart and so many other stocks but other
people speculated on stocks and lost a lot of money
so if you're going to speculate don't invest too heavily in one stock and do not fall in love with a stock your emotions can Cloud your judgments
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Dividend Investors
some people buy stocks primarily for the dividends many investors take their dividends and reinvest them to get more dividends and your wealth accumulates over time so this is a great way to build your
passive income
so you can set your accounts to reinvest your dividends automatically it's called a DRIP (dividend reinvestment program) I am personally a big fan of dividend investing because you get paid for doing nothing so if you're dividend investing your money is making you money so you should know from the get-go which style is most appealing to you and it could be more than one it could be a combination but there's no one right answer there's no one right method so whichever path you take you should understand
The pros and cons
of that method or that style now let me tell you what stocks do I think are best for beginners there will be so many stocks to choose from small companies big companies companies in different sectors energy technology really estate retail banking Pharmaceuticals Etc there will be companies that Focus their sales in the US there will be multinational companies there just so many options I would suggest that as a stock market beginner you invest in bigger and more stable companies the reason why I'm saying this is because of risk and reward if you invest in a smaller non-name company there's a higher probability that you can lose a lot of money as a beginner you should get a feel for the stock market take it easy and just learn once you get more experience and knowledge then you can slowly move out of your comfort zone into
Stocks that offer more risk and reward
if you don't want to take this advice and you want if you want to jump straight into risky stocks then I beg you please do so with a smaller amount of money please take my advice the stock market is not a get-rich-quick scheme in the stock market you want to be an investor you do not want to be a gambler and I want to see you make money as a beginner it is better for you to make a little bit of money than to lose money so I would recommend sticking with safer stocks to start and learning little by little slow and steady wins the race and it's a marathon and just so you know if you want to be very safe and diversify then you can always buy index funds an index fund is a collection of stocks it's like a big basket of stocks where you get diversification so it's a way for you to buy a little of almost everything which decreases your risk
Now in the stock market
you can choose how to invest your money so let me give you two options and you can decide which method that you prefer so
Option number one
is that you can search for good stocks to buy this is known as stock picking so you're trying to pick the winners if you're going to stock pick then you must spend time monitoring your stocks to ensure that everything is going well
Option number two
is index funds or ETFs so if you don't want to become a stock picker you can invest in index funds or ETFs in the stock market if you invest in an index fund or ETF in the stock market that's like buying a little bit of all the stocks in the stock market so there are pros and cons to this approach which I will tell you about right now so today I'm teaching you about
- Index Fund investing which includes includes what is an index fund
- the pros and cons
- index funds versus ETFs and
- how to invest in them
so let's start with this
What is an index
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