About Stock Market Basics

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Some basics of the stock market include deciding on how to divide money between fixed income, bonds, equities and stocks, and diversification of investments is important, putting a bit of money in large, small, growth, international and emerging companies. Learn about the stock market with investing advice from a certified financial planner in this free video on personal finance.

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Video Transcript

Today we are going to talk a little bit about stock market basics. One of the biggest decisions that you need to think about is how you are going to divide your money between fixed income and bonds versus equities or stocks and the reason for that is that is what is really going to determine how much risk and volatility your portfolio experiences. There are some other areas that you need to consider, the biggest piece is diversification and the way that you diversify your portfolio is to make sure that you have a variety of investments. Some examples would be you need large companies, small companies, value companies, growth companies, international and emerging market companies as well as some real estate and then you also need to think about short term bonds and long term bonds. Having a little bit of money in each one of these areas will help you diversity your portfolio and receive some long term investment benefit.

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