Stock Market
definition a stock represents ownership in a firm and is, therefore, a claim to its profits
the prices at which shares trade on stock exchanges are determined by the supply and demand for the stock
Index Funds
an average of a group of stock prices
examples
- Dow Jones Industrial Average
- S&P 500 Index
- NASDAQ Composite Index
Mutual Funds
#todo complete this section
Trading
--- https://youtu.be/J3fAI3al08Q
trading on the stock market is done through a broker who executes the trade on behalf of the investor
time in the market beats timing the market
Strategies
Fundamental Analysis
fundamental analysis assumes a level of irrationality in the stock market and seeks to take advantage of a stock that does not reflect the intrinsic value of a company in the long term
example Warren Buffet is a well-known value investor who uses fundamental analysis to find stocks that are undervalued
Technical Analysis
technical analysis uses data on past movements in stock price and overall market sentiment in an attempt to predict the future change in a stock's price --- The Motley Fool. technical analysis is generally used by short-term day traders and swing traders. it is the stereotypical trading strategy, with fast-paced candlestick charts over five and a half monitors
Behavioral Analysis
behavioral analysis emphasizes human psychology and cognitive biases and seeks to take advantage of the irrationality of the stock market
Dollar Cost Averaging
dollar cost averaging is a passive strategy which attempts to neutralize short-term volatility by assuming that the long-term trend of the stock market is upward. this is done by investing a fixed amount of money at regular intervals