Basic Stock Investing Rules

What Is Investing?

Investing is one way that people put their money to work to make more money. Investing in the stock market requires a sound stock market investing strategy. The focus of stock investing is on the return.

Stock market investing can be either conservative or aggressive depending on what your prefer to do. The best stock market investing advice is to always weight the expected return against the risks that may be involved. However, before you get started you should know the basics of stock market investing. The first thing to learn is the types of stocks that are available.

Basic Stock Information

Types of Stocks

Understanding the type of stock options you have is the first step in understanding stock marketing investing. The two main types of stock are common stock and preferred stock. Common stock is what the majority of the public holds as individuals. Most of the information you hear about stocks being up or down has to do with common stocks.

Aside from dividends, preferred stock actually has less rights than you get with common stocks. Companies that have preferred stock will usually get first call on the dividends ahead of common stock which means they are able to pay consistent dividends. Many investors will purchase preferred stock. Next you should consider the methods of trading stock.

Basic Stock Trading Information

Ways to Trade Stock

You always hear of stock investing, but what exactly goes into investing in stock market trading. Trading in stock investing is basically the same as buying and selling although there is a little more to it. Stock market investing has two main methods of trading, on the exchange floor and electronically.

When it comes to stock market investing most people think of the trading floor at the New York Stock Exchange or NYSE. This process involves individuals actively trading stock on the stock exchange floor and within a few minutes to an hour you will get a call from your broker regarding the amount of your trade.

Another option that is available for stock investing is the electronic method. The NASDAQ system is entirely electronic while the NYSE one have a small percentage of their stock market investing done online. Electronic stock investing is quickly becoming a popular stock market investing strategy. Rather than human brokers with the exchange floor method, electronic stock investing uses a large computer network to match up sellers with buyers. Many prefer this method since it is both efficient and fast when it comes to stock market investing. The company traders who are investing in pension funds, mutual funds and other stocks prefer this investment method.