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Stock Market For Beginners 2020 (Ratios & Metrics (Terms and Stats…
Stock Market For Beginners 2020
General Thoughts
The goal of investing is to limit risk as much as possible while increasing reward.
make sure you investments are based off of logic and not emotion.
Try using a buddy system, by talking to a friend about the stokes you are thinking about buying
Curb your ego!
Stocks Vs. Funds
This is Vs. a bond where you're essentially giving the company a loan.
Funds are collections of stocks divided over several companies, these are lower in risk. an example of these are mutual funds
These funds are used to measure the strength of the economy, such as the Dow.
Because they are lower risk they are also lower reward.
Bullish Vs. Bearish
Bullish is a upward motion
Bearish is a downward motion
Investing Strategies
Technical Analysis
Is more
short term
investing, involving watching the stocks change day by day. Terms used in this catagory are
day trading
and
swing trading
Fundamental Analysis
Involves finding companies whose stocks are lower then they should be and investing in the
long term
.
Passive Funds
Behavioral
How to Buy
Apps
Traditional
Charlesschwab
Fidelity
Vangaurd
TD Ameria Trade
Some of these brokerage's like Vanguard or fidelity has build in research platforms.
Nu-School
Robin hood
M1 Finances
Weeble
Different kinds of accounts
Individual
This is the most simple form of accout
Custodial
can be used for those under 18
IRA
Joint
Passive Vs. Active
there are to ways to learn reading books and gaining experiance
Active investing
means going and reading about companies and looking at the condition of their stokes. This can take anywhere between 5-10 hours a week.
Passive investing
is based on dollar count average, this includes mutual funds, index fund.
Long Term Vs. Short Term
Success is tied to the long term
Make sure to study companies' financial records.
What is a Stock?
It is a piece of a company that you own.
If you own a few shares of a company you may be invited to shareholding meetings.
If you have a lot of shares you may be able to vote on what the company does.
Stock Research
Quantitative
Focus' on hard facts and numbers
Qualitative
This is the deep dive into the company. Where you look at:
The company's model
Their company culture
The Leadership
This research can give you an idea of where the company could be heading
Most people spend 20% on qualitative and 80% on Quantitative.
Look for a companies' investor relations page.
Look for their For 10k, this will show the numbers for the past year and their prediction for the future. Download it.
Be a weary though, because it is biased.
10Q's are updates to their 10k.
Ratios & Metrics
PE Ratio
Earning Per Share
Returns on shares
Return on Assets
Market Cap
Total market value of the company
Is the Shares x Share Value = Market Cap
Terms and Stats
Beta
is the volatility of a stock. 1 being average, above high, below low.
Volume
is how much a stock is being traded
Dividend, a little extra payed back to the investors