Manual of common stock market conditions
Can be a stock market tool a great investment, but many people find themselves unsure of investing in the market or not, because they are not familiar with some of the most common conditions associated with trading in the market. If you are one of these people, don't despair; below you'll find many of the most common terms associated with the stock market specific to help you understand Investment News that you hear.
Equity is clearly one of the most traded commodities on the stock market ... They are shares of companies that are sold and traded publicly. Each share of stock is part ownership in the company that issued the stock, usually the shareholder have the right to vote in shareholders meetings. Shareholders are also given advance notice of future divisions, mergers and the release of new shares.
Bonds are similar to equities, but they are more often issued by governments than by individual companies. Bonds are issued with a specific date is due, after which it is disbursed and payment of their current value to the holder of the bond. Whenever the holder of the bond owns the bond before the maturity date, the more money owed in the bond and the greater the what you get at maturity.
Profit distributions are additional payments made to shareholders after a particularly profitable quarter. Many people automatically reinvest their profits, and get more shares of stock equal to the amount of dividends that have been paid.
Futures are traded on the same lines as stocks, but are purchased against the future cost for the year. When future contracts mature, money is made if the actual price of the goods is higher than that paid for future contracts, and money is lost if the price is lower than that paid.
Circulation of indicators
Commodity-based equity groups or market sectors can be bought and traded as an indicator; common indicators include the diamond market, the gold market, technology sectors, health care and other such groupings.
Trading on the sidelines
Trading on the margins is similar to trading in shares with borrowed funds ... You can buy stock for part of the actual price, and the rest is due at a later date or when you sell the stock. The middleman who sets the order must have your margin portion of the cost before making the request, which is usually 50% of the share cost.
The bull or the bear market.
Bull and falling markets are terms used to describe trends in the stock market. A bullish market is one in which stocks continue to rise over a long period of time, the market is considered optimistic. A declining market is a market in which prices fall over an extended period of time, and is considered a pessimistic market.
Dissections are a way for companies to devalue their individual shares without devaluing their shares as a whole. The most common type of evaluation is split two-to-one, where the division of each share of stock into two shares ... This doubles the total amount of shares, although the total amount invested is still the same and each individual stock is worth one half the value of his ex. End up owning stock holders twice as many shares after the split two-for-one, although the total amount of his investment remains as it is.