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The ABCs of the Stock Market

May 05, 2024

Hello Stoic Investors,

Today I want to help you clarify which terms are actually essential to know when it comes to

investing.

 

As a matter of fact, a key part of being an investor is to have a good understanding of the terms and

definitions which characterize the stock market, but it's easy to feel lost among the multitude of them that

exist out there.

 

Without a doubt, I can tell you two things:

1. 99% of the terms that one might think are necessary are actually marginal, only adding confusion to

something that is already complex;

2. The remaining 1% of terms is what is truly important to know, and I've listed them below.

 

The ABCs of the Stock Marke 

1. Financial Assets

Stock: Ownership share in a company.

ETF (Exchange-Traded Fund): A type of investment fund that trades on an exchange like a stock.

Bond: A fixed-income investment that represents a loan made by an investor to a borrower, usually corporate or governmental.

 

2. Company Attributes

Market Capitalization: The total value of a company's outstanding shares.

IPO (Initial Public Offering): The first sale of a company's stock to the public.

Blue-Chip Stocks: Stocks of large, well-established, and financially stable companies.

Dividend: A portion of a company's profits distributed to shareholders.

 

3. Stock Market Classifications

Bull Market: A market characterized by rising stock prices and positive investor sentiment.

Bear Market: A market characterized by falling stock prices and negative investor sentiment.

 

4. Asset Evaluation Tools

P/E Ratio (Price-to-Earnings Ratio): A valuation metric that compares a company's stock price to its earnings per share.

Volatility Index (VIX): A measure of market volatility (the degree of variation or fluctuation in stock prices) and investor sentiment often referred to as the "fear index."

Resistance Level: A price level at which a stock has historically struggled to rise above.

Support Level: A price level at which a stock has historically struggled to fall below.

 

5. Strategies for Stock Market Transactions

Market Order: A type of order to buy or sell a security at the current market price.

Limit Order: A type of order to buy or sell a security at a specific price or better.

Stop Loss Order: A pre-defined order to sell a stock if it reaches a specific price, limiting potential losses.

Market-on-Close Order: An instruction to buy or sell a security at the market price during the closing auction.

Market-on-Open Order: An instruction to buy or sell a security at the market price during the opening auction.

Short Selling: Selling borrowed stocks in the hopes of buying them back at a lower price in the future.

 

These are all the necessary terms you need to know when it comes to investing, and now you have them all

together in a handy list.

 

You don't need to complicate your life by trying to learn every possible term that exists concerning the world

of investments.

Sometimes, keeping it simple is the best choice!


 

See you again next week.

 

Whenever you're ready, here is how I can help you:

1. Take advantage of all our Free Resources and start your journey as Stoic Investor 

2. Book a Free Consultation to ask your investing questions and we will point you in the right direction

3. Watch hundreds of Video Testimonials of Stoic Money Clients from 25 different countries

About Me

I am Vittorio Rigato, the Investing Coach behind Stoic Money.

I invested for more than 8 years, both for myself and by managing the 7-figures retirement account of my family.

After my¬†Master Degree in¬†Finance & Management,¬†I worked in the FinTech industry in Frankfurt (Germany) and managed financial products with value up to ‚ā¨100 Millions.

In 2021 I have founded Stoic Money to teach employees and professionals worldwide how to invest to reach $1,000,000 Net Worth and beyond. Many of them reviewed Stoic Money service with a video testimonial here.

Multiple Finance News Websites like Yahoo Finance and Euronews talked about Stoic Money mission and services.

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