Making Sense Of Stocks

You can't build serious wealth without owning shares in the market. Here's all you need to get started.

investments than bonds or savings accounts. They’re great for long-term gains, but are volatile investments as well. They sometimes hit rough times.

Needless to say, it’s of the utmost importance to choose stocks well. There’s no getting around some old-fashioned homework, preparation you’ll have to do to get a sense of what kind of company you’re buying into. Don’t forget, too, it’s best to approach the stock market with long-term patience. The market offers some great opportunities, but only if you’re willing to stick with your investments.

In all the talk about money and risk, it’s easy to overlook one important feature of stocks: ownership of a piece of corporate America. Buy a stock, slip it into your investment portfolio, and you’ve just pocketed a portion of the economy, a piece of Big Business U.S.A. You’re in line to benefit directly from the health of the nation’s industries and share in the expansion of key sectors-technology, healthcare, consumer goods, to name a few. Think of it this way: in your armchair, reading the newspaper or staring at the evening news, you’re just an observer. As a shareholder, you’re a participant, and one whose expertise is bound to grow over time.

Once you become a shareholder, or partial owner of a company, you’ll be asked to vote on a number of key issues, not day-to-day business activities, but weighty matters, nonetheless. One day, it might be just who will get to sit on the company’s board of directors. Another time you’ll be asked to vote on a takeover offer a company has received from an outside firm.

Think of it. Your portfolio can also be seen as a way to cast your vote on a number of other issues. Should you decide to buy stock, you should purchase shares in companies that are not only profitable, but whose products and practices you know and believe in. Your backing is a form of popular approval, a thumbs-up to the chief executive that the new gadgets rolling off the assembly line look great or that the promotion of an African American to the company’s highest ranks is an encouraging sign to you. Shareholding can be your means to stand up and be counted, to whisper in the ears of the bosses a
nd clue them in to what’s on your mind.

What it’s All About
Welcome to your piece of the executive suite.

Don’t choke. Buying stock, after all, makes you the partial owner of a publicly traded company, one of the nearly 9,000 corporations whose shares are exchanged on the New York Stock Exchange, the Nasdaq, or the American Stock Exchange.

Of course, from all outward appearances, owning stock is a most modest take on the average CEO’s perks. There’s no plush furniture to speak of; no reserved parking space for your Mercedes-Benz, nor a chauffeur to whisk you to and from the helipad. You won’t get a secretary to clean up your correspondence. And by the way, forget about playing on the office intercom, too.

Despite the lack of flash,

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