Making Sense Of Stocks

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

stock ownership, stock purchases, and sales are recorded electronically and monitored in accounts you might set up with your brokerage, or in some cases with the company whose shares you own.

If you’re nostalgic, get ready to pay the price for your piece of the past. Some brokerage firms charge a fee to issue you a certificate. But who knows …these days the value of the old-time certificates has risen and they have become collectors’ items. be

From the Black Enterprise Guide to Investing, by James Anderson. Copyright (c) 2000 by James Anderson. Published by arrangement with John Wiley & Sons Publishers. All rights reserved.

Sign Language – Symbols
The stock market has its own special way of identifying companies, a tag, usually three or four letters long that analysts, brokers, and other professionals use to refer to a company. That abbreviation or nickname for a stock is called a ticker, ticker symbol or sometimes just a symbol. Tickers were thought up back in the days when brokers and institutional investors followed a ticker tape spewing from a machine. At the time, there needed to be an easy way to identify long company names without spelling them out. After all, there’s only a little bit of room on ticker tape and a lot of companies to identify. Tickers have since stuck and you’ll find that they often come in handy when you’re talking to a broker or looking a stock up online.

Symbols vary in length, according to the exchange where a stock trades. New York Stock Exchange companies have one-, two-, or three-letter symbols (C is Citigroup, F is Ford, PEP is Pepsi, GE is General Electric, SWY is Safeway). American Stock Exchange firms have either two- or three-letter symbols. On the Nasdaq, stocks carry four- and sometimes five-letter symbols (INTC stands for Intel, etc).

Bull Market, Bear Market, Crash or Correction ?
You hear a good number of phrases describing the market and the overall mood of investors. Some, like “bull market” or “bear market,” are used so often they’re widely understood. A bull market, most of us know, is a time when stocks are rising in value. Bulls are investors, market players who feel the market-or a particular stock-is going to keep climbing.

A bear market, meanwhile, is a period when stock prices slide. A bear feels the market is headed downward. How far do share prices have to drop to constitute a bear market? There’s no standard decrease, but, by and large, a 15% fall, as measured by the Dow Jones industrial average or the S&P 500, identifies a bear market. Bear markets tend to show up every five years or so.

Bears in the wild come in several species, some with claws that are sharper than others’. Bear markets, too, come in a few varieties, some more ferocious than others. The scariest bear market around is a crash. During a crash, share prices drop drastically during a day, maybe two, of trading. The last crash the stock market suffered was in October of 1987,

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