Things to know before investing in the stocks markets

For this post, I would like to talk about the thinks you should know when investing in the stocks. This story is mainly relate to my topic because one of my supporting idea in the term paper is about investing in stock market. Therefore, the information of this story are important for me to explain why investing in stock market is good.


In the article, it said that stocks are not just a pieces of paper. You will become one of the shareholder in company when you buy it. There are many different kind of stocks in the market. We can divide it by the company size, sector, and type of growth pattern. In addition, stock prices track earning. "Over the short term, the behavior of the market is based on enthusiasm, fear, rumors and news. Over the long term, though, it is mainly company earnings that determine whether a stock's price will go up, down or sideways".(cnnmoney.com, 2010) Moreover, the best way to get and save money for long term goal is to investing in stocks. Individual stocks are not the market. A good stock market may goes up while other is going down. There is also no guarantee for a great track that will perform good in the future. Furthermore, a $100 stock can be cheap if it can earn a lot of money. However, a $2 stock can be expensive if its earning is low. Therefore, you can not tell how expensive a stock is by only looking at the price. Finally, it would be wise if you have different companies of stock. In case that one of the company goes down, you still have other company.


To sum up, there are many things that you should learn before investing in stock. I would be better if you know some of the basic thing before you make the decision. I did learn many things from this story such as what to concern before buying the stock, what is stock and so on. It would help me to get more idea about investing in stock.


source: http://money.cnn.com/magazines/moneymag/money101/lesson11/