Stock Market Investment Guide

by Sarah Freeland

How does the stock market work? This is a question that most novice investors ask their financial advisors. If you want to know the answer to this question then you should first learn what the stock market is. The stock market, simply put, is a market where companies and entities can finance their operation by offering shares of company stocks, bonds and derivatives to the public. Currently there is a huge worldwide investment market valued at over $350 trillion U.S. This market is made up of about $300 trillion in derivatives, $45 trillion in bonds and $22.5 trillion in worldwide stocks.

The next thing that you will need to learn about when you learn how the stock market works is how stocks, bonds and derivatives are offered to the public. There are several national and international markets that you can find investment product listings. One of these markets is the NASDAQ. When you view the listings of a particular stock market you will see that each stock, bond or derivative will be represented by a trade symbol. Next to each symbol will be the products current share price and a number that represents its movement for the current trading day, and possibly its movement for the week or year. You can use this information to make decisions on what stocks to buy and what stocks to sell.

The final step in this stock investment guide is how to buy and sell stocks, bonds and derivatives. First you will need to set up an investment account with a stock broker or with an online investment site. After your account is established you will need to fund it. After your investment account has been funded you will need to place your buy order. This order will need to include how much money you want to invest and what stock, bond or derivative you are interested in. Your stock broker, or investment site manager, will take your purchase order and try to purchase as many shares as possible with the amount of money you have allotted for your investment. You should note here that you will need to budget for commissions and transactions fees when you are writing out your purchase orders. To sell a stock you simply place a sell order with your broker. They will then try to sell your shares for the highest price possible.

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