Basics of Stocks

Wouldn't you love to be a business owner, but never have to rock up to work? Wouldn't it be great to sit back, and watch your company grow from the comfort of your own home? You can sit back while the dividend checks roll in. This may sound too good to be true, but is more achievable than you think.

Have you guessed it yet? Yup, that's right. I'm talking about stock trading. This financial instrument is the greatest tools ever created for personal wealth building. They are the cornerstone of almost all investment portfolios. Once you start on the road to building your own wealth, and eventually achieving financial freedom, you will need a solid understanding of stocks, and how to trade on the stock market.

In the past thirty years, the internet has created more opportunities for the average person to participate in the stock market. People's interest have grown exponentially since the boom of the net. Trading stocks used to be only for the rich, and powerful. Now, almost anyone can trade stocks with only a few hundred dollars. The internet has not only made it easier for people to trade stocks, but has also provided people with plenty of free information online. People no longer need to buy stacks and stacks of books to gain a thorough understanding of the stock market. All this information is available online for free, or for a small price.

Despite the increased popularity of stock trading, most people don't fully understand them. Many people glean small bits of information from overheard conversations on the train, or from their colleagues over a coffee. There's no guarantee these people know what they're talking about. Most likely, you've heard people saying something along the lines of "My cousin's stocks tripled in price since he's bought it. Now he's buying stocks XYZ". You're less likely to hear stories of "I lost 5k in stocks XYZ when I bought it at the top of the boom". People are less likely to tell you their failures, than their successes. All this information is based on the get-rich-quick mentality. Many people think that stocks is the way to instant wealth, with no risk attached. This is not the case, as proven by the global financial crisis that wiped many people's account. The best approach to trading stocks is education, and information. Protect yourself from making silly mistakes by learning, and understanding what you are doing, what you are risking, and making educated choices.