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What can we do to have a better understanding of the stock market?

I'm planning to start investing in stocks since its very promising. But as we know, to invest in stocks and become a successful trader, if not successful at least a descend trader, one needs to know the working of the stock market ....as in how it works,what are the factors affecting the stock prices etc.

Now, I know one needs to analyse and do a lot of research to figure out the working but i would still like to know what factors i need to observe while learning about the stock graph of a particular company ....and as u can guess i m a complete beginner , so i could really use an explanation with the basic terms:P

thanks

8 Answers

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  • Anonymous
    1 decade ago
    Favorite Answer

    If you're a "complete beginnner" then you're a bit premature in concluding that "its very promising." Start with a beginner's book like "Stock Investing For Dummies."

  • 1 decade ago

    The best place to really start getting a grip on the stock or sharemarket is to go to lots of seminars on it as you meet other people there who can talk with you about it just don't stop at going to one or two, you need to go to a few until you feel your getting familiar with the termonology and what it means.You can also go to your local library & read about the stockmarket. There are different types of markets for example stocks, shares CFD's (contracts for difference) foreign exchange these are just a few to mention. There are courses out there on stockmarket trading etc but they cost quite alot of money and then you have to have more money to trade with when you've completed the course. The biggest reason people loose their money in these fields is simply that they DO NOT put a risk management factor in place when they trade. I have done some trading in the past, you need alot of dedication and I found I didn't have it. And you need patience lots of it because there's so much to learn and you never stop learning because the markets are changing all the time and new stratagies are being discovered. Its an interesting journey. Mindset is another thing you have to tackle with this its not for the faint hearted. But please just start by library books and free seminars, its a very good start as it will give you a good kickstart to stocks & trading. GOODLUCK.

  • I play on this site Empire Avenue it's a "stock market" game where you're the "company" and people buy shares in you if you've got good internet influence your stocks will go up ie. Twitter, Facebook and a Blog... You can also buy shares in other people to make your stock portfolio go up... it's really fun and it's a lot easier then losing real money and you'll get a feel for buying and selling... but it's by invite only so if you're interested go to http://onemoredaywithyou.wordpress.com/ and subscribe and I'll send you an invite (that's just so your info isn't all over the internet :D

  • 1 decade ago

    Start with media such as CNBC or Bloomberg and get to know the major players, analysts, companies making business news. That's one of the best ways to learn about the language. Watch PBS.org with shows such as Frontline (Breaking the Bank, ten trillion and counting, the warning or the Maddoff Affair) and Nova (Such as Mind over Money) along with the Nightly Business report. Also listen to Suzy Orman or Bob Brinker along with Wall Street podcasts.

    My favorite trading book is Stock market Wizards by Jack Schwager since he interviews the best stock traders or a similar book Investment Gurus by Peter Tanous which shows you the best investment strategies. The books show you that fund managers can beat the market especially with research, strategy and work ethics. You can also buy a dictionary of Finance and Banking or read the classic that most college professors use A randow walk down Wall Street.

    Stock prices or graphs are best learned from the chartists. In general, CNBC and the nightly business report does an excellent fundamental analysis of the most active stocks in the news. What makes the stock market exciting is that the market everyday is trying to find the equilibrium or selling price because of many factors - one being the market. If there is a sell off with the S&P 500 down - it effects 85% of the companies downward as an example.

    Charting in my opinion more as a reference on looking how well a stock is rising or falling. However you should always buy based on the fundamentals such as growth and net income. Cramer was right on for instance when he told viewers to buy P&G last week when it fell out of the blue to the 40's. He told who cares why it's falling and buy PG which instantly send the stock back up.

    One of the best tips look at the mutual funds top holdings in Yahoo Finance under mutual funds and watch the performances of the best funds. It's a good way to tell if a fund is risky. For instance. looking at Top performers in small growth for 1 year comes up with Birmiwal Oasis on the top of the list. One of the top holdings is China Medicine Corp traded on the OTC or penny stocks. This means the fund manager takes huge risks and invests in International stocks. Also looking at the overall best performers for 5 years comes up with the Gold mutual funds. Buyer beware since Gold has been hot for 5 years and a bubble will occur causing one day for the price of Gold to rapidly decline. Thinking of bubbles watch the ascent of money with link below which will tell you the history of Finance from banking to bonds, the stock market and derivatives. History is vital since you don't want to make the same mistakes twice so keep track of your stocks even after several years after you sold. Also buy VT or the total World stock market ETF. Use it as your benchmark of how well your investing. It invests in the NYSE, NASDAQ, American stock exchange along with Europe, Canada, Asia, Latin America and the Emerging Markets. A World average and no brainer way to invest. Try at least 20% of your portfolio if it does better accumulate since sometimes it's hard to beat an average as fund managers have found out. Good luck!

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  • ?
    Lv 4
    5 years ago

    in case you bought $2 hundred, the main you may lose is the $2 hundred. the only way you may lose greater is that in case you borrowed yet another $2 hundred making use of the shares as collateral. that's reported as leverage and you decide on a margin account to do it. If a enterprise stops paying dividends, you will not owe them money yet their share value will drop as people will sell their inventory so which you will land up promoting the inventory for below you bought it for. Dividends are paid quarterly. that's as quickly as each and every 3 months, in different words, 4 cases a 300 and sixty 5 days. The board of directors settle on whether or not and how plenty dividends to pay.

  • Anonymous
    1 decade ago

    Dear Friend,

    If ur a beginner,I suggest you to sign up for the Free Weekly Wealth Letter, the e-mail newsletter packed with money-making investment ideas will be delivered to your inbox every Tuesday morning.

    Weekly Wealth Letter is loaded with unique insights and powerful resources for wealth building through smart investing. What is it you want to do? Get rich through smart investing? Become a millionaire? Thrive in an economic recession?

  • Hoa N
    Lv 6
    1 decade ago

    Check these two books out:

    Stock Trader's Almanac by Yale Hirsch

    Technical Anaalysis for Financial by John Murphy.

    http://www.incrediblecharts.com/

    http://www.pring.com/

    http://www.stockcharts.com/

  • Anonymous
    1 decade ago

    As a beginner, it is advisable to start with equity mutual funds. Else, you can go through various modules of NSE's Certification in financial markets. Like Finacial Markets biginner's module, Securities market basic module and so on. These modules are specifically designed for beginners.

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