How to Research the Stock Market
Learning about stocks is a large undertaking that is well worth the effort. Understanding how the stock market works will help you to make better, more informed investment decisions. There is no one place to learn about the stock market. The Internet is bursting with information about it, but beware of any website that promises you a specific rate of return on any investment. You are your best asset when it comes to determining the best investments for your needs.
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Instructions
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Begin your research on the Internet. The stock market is where investors buy and sell shares of company stocks to add or subtract from their investment portfolio, and most of these transactions are completed electronically over the Internet. The stock market is made up of multiple stock exchanges, some national and others regional. The most well-known national stock exchanges are the New York Stock Exchange (NYSE) and the American Stock Exchange (ASE). The NYSE recently acquired the ASE and has integrated all of its data into the NYSE information database. Visit the NYSE's website to access information from both exchanges.
The websites that support the most popular U.S. stock indexes are also very good sources of up-to-date investing information. These indexes include the Dow Jones Industrial Average, the NASDAQ, the S&P 500 and the Russell 2000. There are many other indexes to research, but beginning your research with these four will provide you with appropriate, timely data.
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Expand your research net to include other valuable sources. Yahoo! Finance is an extensive resource that provides all kinds of information. One of their best resources for individual company, index, mutual fund, bond, option and industry research is the website's Company and Fund Index. This page allows you to search for information using a company name or ticker symbol. Ticker symbols are the codes assigned to a company's stock and investment information and provide the fastest search results. For example, The Home Depot's ticker symbol is HD. Searching "HD" in the Company and Fund Index will bring up information specific to The Home Depot's stock information, including quotes, news, a company profile, research materials, messages and Insider information. Start all initial company research with this website and you will come out of it with a good idea of the firm's financial health.
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Open a brokerage account with an investment companies. Every brokerage company worth its place in the industry provides its clients with proprietary research tools to help them make the best investment decisions. Different brokerage firms provide different levels of service to their customers, from full-service investment help and advice to self-directed research tools. Invest with a brokerage firm that provides the level of service appropriate for your needs. The more direct help that brokerage firms provide to their clients, the more they charge for sales commissions. E*TRADE is a low-cost brokerage firm that has a brick-and-mortar presence in major cities, as well as an online presence. Merrill Lynch is a full-service investment firm that is well-respected in the financial world.
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Begin to look at other types of investments when, and if, your personal investment situation can tolerate more risk. The derivatives market provides investment options that include stock options and commodities--wheat, oats, sugar and beef. The Chicago Board Options Exchange is the go-to source for all things to do with stock options. You can make a lot of money trading options, but you can lose a lot, too. The same goes for trading in commodities. The Forex market is where you can trade in money--actual U.S. dollars, British pounds sterling and Swiss francs. The more educated you are going into an investment area, the safer your investments will be.
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Tips & Warnings
Begin your research with a handful of companies whose products you use and like. Searching for company names will provide you with their stock market ticker symbol--the code that is attached to all of their information on Wall Street. Learn the company's ticker symbols to make your research easier.
