Most Common Stock Market Terms for Beginners

Most common stock market terms for beginners 1

If you are new, then welcome to the wonderful world of the stock market! This is one of the fastest evolving industries in the world and demands information to be delivered to stock brokers, buyers, and traders at the soonest possible time to make the trading more accurate and productive for them. Stock market investing for beginners may be a little challenging but once you get used to it, things will become easier to handle. Here is some of the best stock market investing advice for beginners that you may find useful in your quest to learn how to invest properly. Stock market investing is going to be a breeze once you get yourself familiar with the below terms.

Stock Market for Beginners Term #1: The Stock

A stock is a share in a company. The more stocks you have, the more ownership or power you have over a specific company. NASDAQ and the New York Stock Exchange are two of the most influential and watched markets in the country. Since we’re studying the stock market for beginners, let’s take a look at the two forms of stocks.

Stock Market for Beginners Term #2: The Common Stock

As basic stock information for beginners, a common stock entitles you to an ownership of the company. The basic rule is: 1 common stock gives you 1 vote. The more common stocks you have, the more power you have over the company. Looking at the stock market for beginners, this would probably be the stock you will be investing more. This is more affordable and is easy to acquire. However, since this is a common stock, it would be nice stock information for beginners to understand that this ownership is the last to be given a dividend in case of company closure.

Stock Market for Beginners Term #3: The Preferred Stock

Preferred stocks, for stock market investing for beginners, are the “elite” stocks that entitle the owner of such to be given preference over common stocks. Further, these stocks can give you more voting power and guaranteed dividends, too. In the event of company closure, these stocks will be given dividends first versus the common stocks.

Stock Market for Beginners Term #4: The Bear and Bull Market

These terms are easy to remember and may be familiar to you. The bear market represents a slow market or a market that is predominantly unsuccessful. Majority of the transactions may have failed or there are a few traders for that specific day. On the one hand, bull markets are strong markets where transactions are successful and a lot of trading activity has been recorded same day.

Stock Market for Beginners Term #5: The Pigs

These are the greedy ones. They often want and prefer short term investments and would want to earn profit the fastest way possible using the most frequent stock market quotes. They are referred to by the business as high risk investors and are most commonly avoided by well-established companies.

The stock market for beginners may be scary at first, but this is how it’s supposed to be. It’s like your first day at school when everything is new and you would need to get a feel of everything first before you speed-up.