Stock Market Basics for Beginners

The stock market is where companies raise capital and investors buy shares to earn returns. Understanding it is crucial for wealth building.

1. What is the Stock Market?

A marketplace where stocks of publicly traded companies are bought and sold. Prices fluctuate based on supply, demand, and company performance.

2. Types of Stocks

• Common Stocks: Voting rights, dividends, potential growth.
• Preferred Stocks: Fixed dividends, higher priority on assets during liquidation.

3. How to Invest

Open a brokerage account, research companies, and decide on strategies like long-term investing, day trading, or dividend investing.

4. Risks and Rewards

High potential returns come with risk. Diversify and manage your portfolio to minimize losses.

5. Common Mistakes

• Investing without research
• Emotional trading
• Ignoring market trends

6. Tips for Beginners

Start small, use index funds, stay patient, and continually educate yourself about market trends.

Conclusion

The stock market is a powerful tool for building wealth. Knowledge, discipline, and strategy are the keys to long-term success.