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Learn The Stock Market - Key Stock Market Terminology to Ensure Successful Trading - Understanding the Types of Stocks, Learning the Stock Market Ups and Downs

The Ins and Outs of Stock Market Terminology

Everyone wants to jump on the stock market bandwagon and try their hand at investing in their future. The stock market is tricky and without an understanding of stock market lingo, you will not succeed. Brokers speak their own language and unless you take the time to understand them, you are likely to fail in your endeavors.

Understanding the Types of Stocks

The first step in buying stocks is understanding the different types of stock options available. Blue Chip Stocks will be your best bet if you want to improve your portfolio. Blue Chip Stocks are stocks associated with well-established companies that are stable and offer little liability. These stocks will pay regular dividends and have little chance of failing. Secondary Stocks are another solid option. These stocks are with companies who are a little less established than the Blue Chip Stock companies. However, you will still see annual dividends. The pitfall with Secondary Stocks is there is a chance of losing money if the company fails.

If you are looking to make regular money with the stock market, you may want to choose an Income Stock . Income Stocks will give you the advantage of corporate entity growth. They pay regular dividends and give you the opportunity for continued income as long at the companies are growing. This type of investment is more often found in the real estate and energies sectors adn the dividends are determined by the growth of the companies.

Penny Stocks. are the most dangerous of the types of stocks. These stocks are purchased over the counter without the utilization of the three major exchanges (NYSE, NASDAQ, or AMEX). These stocks are considered high risk and you will run the risk of losing your money or receiving a weak return on investment.

Learning the Stock Market Ups and Downs

When purchasing stocks, you will also need to know the atmosphere of the market. Recently, you have seen the full effects of a bear market. Knowing the difference between a bull and bear market can make or break your investments. Bull Markets are times when you see prolonged periods of increased profits in the market. Many people choose buy stocks in a Bull Market, as the market is strong and growing during these times. However, the tides turn quickly in the stock market and you can find yourself in a Bear Market rather quickly. A Bear Market is a prolonged time of decreased earnings on the stock market. Many times, this can be a good time to purchase stocks because you can receive a large return on investment when the stock market rebounds.

It is possible to make money with stock market investments if you understand the process. Ask yourself “What is Stock Market Terminology?” and if you cannot answer the question, you are not ready to begin trading. Making unprepared purchases will ruin your portfolio and you will most likely lose the money you are trying so hard to make.

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