What Is Investing?

The act of committing money or capital to an endeavor with the expectation of obtaining an additional
income or profit.

It's actually pretty simple: investing means putting your money to work for you. Essentially, it's a different
way to think about how to make money. Growing
up, most of us were taught that you can earn an
income only by getting a job and working. And that's exactly what most of us do. There's one big problem
with this: if you want more money, you have to work more hours.

There are many different ways you can go about making an investment. This includes putting money into
stocks, bonds, mutual funds, or real estate (among many other things), or starting your own business.
Sometimes people refer to these options as "investment vehicles," which is just another way of saying "a
way to invest." Each of these vehicles has positives and negatives, which we'll discuss in a later section of
this tutorial. The point is that it doesn't matter which method you choose for investing your money, the goal
is always to put your money to work so it earns you an additional profit. Even though this is a simple idea,
it's the most important concept for you to understand.

What Investing Is Not

Investing is not gambling. Gambling is putting money at risk by betting on an uncertain outcome with the
hope that you might win money. Part of the confusion between investing and gambling, however, may come
from the way some people use investment vehicles. For example, it could be argued that buying a stock
based on a "hot tip" you heard at the water cooler is essentially the same as placing a bet at a casino.

True investing doesn't happen without some action on your part. A "real" investor does not simply throw his
or her money at any random investment; he or she performs thorough analysis and commits capital only
when there is a reasonable expectation of profit. Yes, there still is risk, and there are no guarantees, but
investing is more than simply hoping Lady Luck is on your side.
The Concept Of Compounding
Compounding is the process of generating earnings on an asset's reinvested earnings. To work, it requires
two things: the re-investment of earnings and time. The more time you give your investments, the more you
are able to accelerate the income potential of your original investment, which takes the pressure off of you.

To demonstrate, let's look at an example:

If you invest $10,000 today at 6%, you will have $10,600 in one year ($10,000 x 1.06). Now let's say that
rather than withdraw the $600 gained from interest, you keep it in there for another year. If you continue to
earn the same rate of 6%, your investment will grow to $11,236.00 ($10,600 x 1.06) by the end of the
second year.

Because you reinvested that $600, it works together with the original investment, earning you $636, which is
$36 more than the previous year. This little bit extra may seem like peanuts now, but let's not forget that you
didn't have to lift a finger to earn that $36. More importantly, this $36 also has the capacity to earn interest.
After the next year, your investment will be worth $11,910.16 ($11,236 x 1.06). This time you earned
$674.16, which is $74.16 more interest than the first year. This increase in the amount made each year is
compounding in action: interest earning interest on interest and so on. This will continue as long as you keep
reinvesting and earning interest.
Investment Objectives
Generally speaking, investors have a few factors to consider when looking for the right place to park their
money. Safety of capital, current income and capital appreciation are factors that should influence an
investment decision and will depend on a person's age, stage/position in life and personal circumstances. A
75-year-old widow living off of her retirement portfolio is far more interested in preserving the value of
investments than a 30-year-old business executive would be. Because the widow needs income from her
investments to survive, she cannot risk losing her investment. The young executive, on the other hand, has
time on his or her side. As investment income isn't currently paying the bills, the executive can afford to be
more aggressive in his or her investing strategies.
We've already mentioned that there are many ways to invest your money. Of course, to decide which
investment vehicles are suitable for you, you need to know their characteristics and why they may be
suitable for a particular investing objective.

Bonds
Grouped under the general category called fixed-income securities, the term bond is commonly used to
refer to any securities that are founded on debt. When you purchase a bond, you are lending out your
money to a company or government. In return, they agree to give you interest on your money and eventually
pay you back the amount you lent out.

The main attraction of bonds is their relative safety. If you are buying bonds from a stable government, your
investment is virtually guaranteed, or risk-free. The safety and stability, however, come at a cost. Because
there is little risk, there is little potential return. As a result, the rate of return on bonds is generally lower
than other securities. (The Bond Basics tutorial will give you more insight into these securities.)

Stocks
When you purchase stocks, or equities, as your advisor might put it, you become a part owner of the
business. This entitles you to vote at the shareholders' meeting and allows you to receive any profits that the
company allocates to its owners. These profits are referred to as dividends.

While bonds provide a steady stream of income, stocks are volatile. That is, they fluctuate in value on a
daily basis. When you buy a stock, you aren't guaranteed anything. Many stocks don't even pay dividends,
in which case, the only way that you can make money is if the stock increases in value - which might not
happen. 

Compared to bonds, stocks provide relatively high potential returns. Of course, there is a price for this
potential: you must assume the risk of losing some or all of your investment. (For additional reading, see
Stock Basics tutorial and Guide to Stock Picking Strategies.)

Mutual Funds
A mutual fund is a collection of stocks and bonds. When you buy a mutual fund, you are pooling your
money with a number of other investors, which enables you (as part of a group) to pay a professional
manager to select specific securities for you. Mutual funds are all set up with a specific strategy in mind, and
their distinct focus can be nearly anything: large stocks, small stocks, bonds from governments, bonds
from companies, stocks and bonds, stocks in certain industries, stocks in certain countries, etc.

The primary advantage of a mutual fund is that you can invest your money without the time or the
experience that are often needed to choose a sound investment. Theoretically, you should get a better
return by giving your money to a professional than you would if you were to choose investments yourself. In
reality, there are some aspects about mutual funds that you should be aware of before choosing them, but
we won't discuss them here. (You can, check out the details in the Mutual Fund Basics tutorial.)

Alternative Investments: Options, Futures, FOREX, Gold, Real Estate, Etc.

So, you now know about the two basic securities: equity and debt, better known as stocks and bonds. While
many (if not most) investments fall into one of these two categories, there are numerous alternative vehicles,
which represent the most complicated types of securities and investing strategies.

The good news is that you probably don't need to worry about alternative investments at the start of your
investing career. They are generally high-risk/high-reward securities that are much more speculative than
plain old stocks and bonds. Yes, there is the opportunity for big profits, but they require some specialized
knowledge. So if you don't know what you are doing, you could get yourself into a lot of trouble. Experts and
professionals generally agree that new investors should focus on building a financial foundation before
speculating. (For more on how levels of risk correspond to certain investments, check out: Determining Risk
And The Risk Pyramid.)
We've already mentioned that there are many ways to invest your money. Of course, to decide which
investment vehicles are suitable for you, you need to know their characteristics and why they may be
suitable for a particular investing objective.

Bonds
Grouped under the general category called fixed-income securities, the term bond is commonly used to
refer to any securities that are founded on debt. When you purchase a bond, you are lending out your
money to a company or government. In return, they agree to give you interest on your money and eventually
pay you back the amount you lent out.

The main attraction of bonds is their relative safety. If you are buying bonds from a stable government, your
investment is virtually guaranteed, or risk-free. The safety and stability, however, come at a cost. Because
there is little risk, there is little potential return. As a result, the rate of return on bonds is generally lower
than other securities. (The Bond Basics tutorial will give you more insight into these securities.)

Stocks
When you purchase stocks, or equities, as your advisor might put it, you become a part owner of the
business. This entitles you to vote at the shareholders' meeting and allows you to receive any profits that the
company allocates to its owners. These profits are referred to as dividends.

While bonds provide a steady stream of

income, stocks are volatile. That is, they
fluctuate in value on a daily basis. When
you buy a stock, you aren't guaranteed
anything. Many stocks don't even pay
dividends, in which case, the only way that
you can make money is if the stock
increases in value - which might not
happen. 

Compared to bonds, stocks provide

relatively high potential returns. Of course,
there is a price for this potential: you must
assume the risk of losing some or all of
your investment. (For additional reading,
see Stock Basics tutorial and Guide to
Stock Picking Strategies.)

Mutual Funds
A mutual fund is a collection of stocks and bonds. When you buy a mutual fund, you are pooling your
money with a number of other investors, which enables you (as part of a group) to pay a professional
manager to select specific securities for you. Mutual funds are all set up with a specific strategy in mind, and
their distinct focus can be nearly anything: large stocks, small stocks, bonds from governments, bonds
from companies, stocks and bonds, stocks in certain industries, stocks in certain countries, etc.

The primary advantage of a mutual fund is that you can invest your money without the time or the
experience that are often needed to choose a sound investment. Theoretically, you should get a better
return by giving your money to a professional than you would if you were to choose investments yourself. In
reality, there are some aspects about mutual funds that you should be aware of before choosing them, but
we won't discuss them here. (You can, check out the details in the Mutual Fund Basics tutorial.)

Alternative Investments: Options, Futures, FOREX, Gold, Real Estate, Etc.

So, you now know about the two basic securities: equity and debt, better known as stocks and bonds. While
many (if not most) investments fall into one of these two categories, there are numerous alternative vehicles,
which represent the most complicated types of securities and investing strategies.

The good news is that you probably don't need to worry about alternative investments at the start of your
investing career. They are generally high-risk/high-reward securities that are much more speculative than
plain old stocks and bonds. Yes, there is the opportunity for big profits, but they require some specialized
knowledge. So if you don't know what you are doing, you could get yourself into a lot of trouble. Experts and
professionals generally agree that new investors should focus on building a financial foundation before
speculating. (For more on how levels of risk correspond to certain investments, check out: Determining Risk
And The Risk Pyramid.)
We've already mentioned that there are many ways to invest your money. Of course, to decide which
investment vehicles are suitable for you, you need to know their characteristics and why they may be
suitable for a particular investing objective.

Bonds
Grouped under the general category called fixed-income securities, the term bond is commonly used to
refer to any securities that are founded on debt. When you purchase a bond, you are lending out your
money to a company or government. In return, they agree to give you interest on your money and eventually
pay you back the amount you lent out.

The main attraction of bonds is their relative safety. If you are buying bonds from a stable government, your
investment is virtually guaranteed, or risk-free. The safety and stability, however, come at a cost. Because
there is little risk, there is little potential return. As a result, the rate of return on bonds is generally lower
than other securities. (The Bond Basics tutorial will give you more insight into these securities.)

Stocks
When you purchase stocks, or equities, as your advisor might put it, you become a part owner of the
business. This entitles you to vote at the shareholders' meeting and allows you to receive any profits that the
company allocates to its owners. These profits are referred to as dividends.

While bonds provide a steady stream of income, stocks are volatile. That is, they fluctuate in value on a
daily basis. When you buy a stock, you aren't guaranteed anything. Many stocks don't even pay dividends,
in which case, the only way that you can make money is if the stock increases in value - which might not
happen. 

Compared to bonds, stocks provide relatively high potential returns. Of course, there is a price for this
potential: you must assume the risk of losing some or all of your investment. (For additional reading, see
Stock Basics tutorial and Guide to Stock Picking
Strategies.)

Mutual Funds
A mutual fund is a collection of stocks and bonds. When you buy a mutual fund, you are pooling your
money with a number of other investors, which enables you (as part of a group) to pay a professional
manager to select specific securities for you. Mutual funds are all set up with a specific strategy in mind, and
their distinct focus can be nearly anything: large stocks, small stocks, bonds from governments, bonds
from companies, stocks and bonds, stocks in certain industries, stocks in certain countries, etc.

The primary advantage of a mutual fund is that you can invest your money without the time or the
experience that are often needed to choose a sound investment. Theoretically, you should get a better
return by giving your money to a professional than you would if you were to choose investments yourself. In
reality, there are some aspects about mutual funds that you should be aware of before choosing them, but
we won't discuss them here. (You can, check out the details in the Mutual Fund Basics tutorial.)

Alternative Investments: Options, Futures, FOREX, Gold, Real Estate, Etc.

So, you now know about the two basic securities: equity and debt, better known as stocks and bonds. While
many (if not most) investments fall into one of these two categories, there are numerous alternative vehicles,
which represent the most complicated types of securities and investing strategies.

The good news is that you probably don't need to worry about alternative investments at the start of your
investing career. They are generally high-risk/high-reward securities that are much more speculative than
plain old stocks and bonds. Yes, there is the opportunity for big profits, but they require some specialized
knowledge. So if you don't know what you are doing, you could get yourself into a lot of trouble. Experts and
professionals generally agree that new investors should focus on building a financial foundation before
speculating. (For more on how levels of risk correspond to certain investments, check out: Determining Risk
And The Risk Pyramid.)
Bond Basics: Conclusion
 Bonds are just like IOUs. Buying a bond means you are lending out your money.
 Bonds are also called fixed-income securities because the cash flow from them is fixed.
 Stocks are equity; bonds are debt.
 The key reason to purchase bonds is to diversify your portfolio.
 The issuers of bonds are governments and corporations.
 A bond is characterized by its face value, coupon rate, maturity and issuer.
 Yield is the rate of return you get on a bond.
 When price goes up, yield goes down, and vice versa.
 When interest rates rise, the price of bonds in the market falls, and vice versa.
 Bills, notes and bonds are all fixed-income securities classified by maturity.
 Government bonds are the safest bonds, followed by municipal bonds, and then corporate bonds.
 Bonds are not risk free. It's always possible - especially in the case of corporate bonds - for the
borrower to default on the debt payments.
 High-risk/high-yield bonds are known as junk bonds.
 You can purchase most bonds through a brokerage or bank. If you are a U.S. citizen, you can buy
government bonds through TreasuryDirect.
 Often, brokers will not charge a commission to buy bonds but will mark up the price instead.

The Definition of a Stock

Plain and simple, stock is a share in the ownership of a company. Stock represents a claim on the
company's assets and earnings. As you acquire more stock, your ownership stake in the company becomes
greater. Whether you say shares, equity, or stock, it all means the same thing.

Being an Owner
Holding a company's stock means that you are one of the many owners (shareholders) of a company and,
as such, you have a claim (albeit usually very small) to everything the company owns. Yes, this means that
technically you own a tiny sliver of every piece of furniture, every trademark, and every contract of the
company. As an owner, you are entitled to your share of the company's earnings as well as any voting rights
attached to the stock.

Example stock certificate

Common Stock
Common stock is, well, common. When people talk about stocks they are usually referring to this type. In
fact, the majority of stock is issued is in this form. We basically went over features of common stock in the
last section. Common shares represent ownership in a company and a claim (dividends) on a portion of
profits. Investors get one vote per share to elect the board members, who oversee the major decisions
made by management.

Over the long term, common stock, by means of capital growth, yields higher returns than almost every
other investment. This higher return comes at a cost since common stocks entail the most risk. If a company
goes bankrupt and liquidates, the common shareholders will not receive money until the creditors,
bondholders and preferred shareholders are paid.

Preferred Stock
Preferred stock represents some degree of ownership in a company but usually doesn't come with the same
voting rights. (This may vary depending on the company.) With preferred shares, investors are usually
guaranteed a fixed dividend forever. This is different than common stock, which has variable dividends that
are never guaranteed. Another advantage is that in the event of liquidation, preferred shareholders are paid
off before the common shareholder (but still after debt holders). Preferred stock may also be callable,
meaning that the company has the option to purchase the shares from shareholders at anytime for any
reason (usually for a premium).

Some people consider preferred stock to be more like debt than equity. A good way to think of these kinds of
shares is to see them as being in between bonds and common shares.

Different Classes of Stock

Common and preferred are the two main forms of stock; however, it's also possible for companies to
customize different classes of stock in any way they want. The most common reason for this is the company
wanting the voting power to remain with a certain group; therefore, different classes of shares are given
different voting rights. For example, one class of shares would be held by a select group who are given ten
votes per share while a second class would be issued to the majority of investors who are given one vote
per share.

When there is more than one class of stock, the classes are traditionally designated as Class A and Class
B. Berkshire Hathaway (ticker: BRK), has two classes of stock. The different forms are represented by
placing the letter behind the ticker symbol in a form like this: "BRKa, BRKb" or "BRK.A, BRK.B".

Stocks Basics: What Causes Stock Prices To Change?

Stock prices change every day as a result of market forces. By this we mean that share prices change
because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then
the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater
supply than demand, and the price would fall.

Understanding supply and demand is easy. What is difficult to comprehend is what makes people like a
particular stock and dislike another stock. This comes down to figuring out what news is positive for a
company and what news is negative. There are many answers to this problem and just about any investor
you ask has their own ideas and strategies.

That being said, the principal theory is that the price movement of a stock indicates what investors feel a
company is worth. Don't equate a company's value with the stock price. The value of a company is its
market capitalization, which is the stock price multiplied by the number of shares outstanding. For
example, a company that trades at $100 per share and has 1 million shares outstanding has a lesser value
than a company that trades at $50 that has 5
million shares outstanding ($100 x 1 million = $100
million while $50 x 5 million = $250 million). To further complicate things, the price of a stock doesn't only
reflect a company's current value, it also reflects the growth that investors expect in the future.

The most important factor that affects the value of a company is its earnings. Earnings are the profit a
company makes, and in the long run no company can survive without them. It makes sense when you think
about it. If a company never makes money, it isn't going to stay in business. Public companies are required
to report their earnings four times a year (once each quarter). Wall Street watches with rabid attention at
these times, which are referred to as earnings seasons. The reason behind this is that analysts base their
future value of a company on their earnings projection. If a company's results surprise (are better than
expected), the price jumps up. If a company's results disappoint (are worse than expected), then the price
will fall.

Of course, it's not just earnings that can change the sentiment towards a stock (which, in turn, changes its
price). It would be a rather simple world if this were the case! During the dotcom bubble, for example,
dozens of internet companies rose to have market capitalizations in the billions of dollars without ever
making even the smallest profit. As we all know, these valuations did not hold, and most internet companies
saw their values shrink to a fraction of their highs. Still, the fact that prices did move that much demonstrates
that there are factors other than current earnings that influence stocks. Investors have developed literally
hundreds of these variables, ratios and indicators. Some you may have already heard of, such as the
price/earnings ratio, while others are extremely complicated and obscure with names like Chaikin
oscillator or moving average convergence divergence.

So, why do stock prices change? The best answer is that nobody really knows for sure. Some believe that it
isn't possible to predict how stock prices will change, while others think that by drawing charts and looking at
past price movements, you can determine when to buy and sell. The only thing we do know is that stocks
are volatile and can change in price extremely rapidly.

The important things to grasp about this subject are the following:

1. At the most fundamental level, supply and demand in the market determines stock price.
2. Price times the number of shares outstanding (market capitalization) is the value of a company.
Comparing just the share price of two companies is meaningless.
3. Theoretically, earnings are what affect investors' valuation of a company, but there are other indicators
that investors use to predict stock price. Remember, it is investors' sentiments, attitudes and expectations
that ultimately affect stock prices.
4. There are many theories that try to explain the way stock prices move the way they do. Unfortunately,
there is no one theory that can explain everything.

You've now learned what a stock is and a little bit about the principles behind the stock market, but how do
you actually go about buying stocks? Thankfully, you don't have to go down into the trading pit yelling and
screaming your order. There are two main ways to purchase stock:

1. Using a Brokerage
The most common method to buy stocks is to use a brokerage. Brokerages come in two different flavors.
Full-service brokerages offer you (supposedly) expert advice and can manage your account; they also
charge a lot. Discount brokerages offer little in the way of personal attention but are much cheaper.

At one time, only the wealthy could afford a broker since only the expensive, full-service brokers were
available. With the internet came the explosion of online discount brokers. Thanks to them nearly anybody
can now afford to invest in the market. 

2. DRIPs & DIPs

Dividend reinvestment plans (DRIPs) and direct investment plans (DIPs) are plans by which individual
companies, for a minimal cost, allow shareholders to purchase stock directly from the company. Drips are a
great way to invest small amounts of money at regular intervals.
Stocks Basics: How to Read A Stock Table/Quote
Any financial paper has stock quotes that will look something like the image below:

Columns 1 & 2: 52-Week High and Low - These are the highest and lowest prices at which a stock has
traded over the previous 52 weeks (one year). This typically does not include the previous day's trading.

Column 3: Company Name & Type of Stock - This column lists the name of the company. If there are no
special symbols or letters following the name, it is common stock. Different symbols imply different classes
of shares. For example, "pf" means the shares are preferred stock.

Column 4: Ticker Symbol - This is the unique alphabetic name which identifies the stock. If you watch
financial TV, you have seen the ticker tape move across the screen, quoting the latest prices alongside this
symbol. If you are looking for stock quotes online, you always search for a company by the ticker symbol. If
you don't know what a particular company's ticker is you can search for it at: http://finance.yahoo.com/l.

Column 5: Dividend Per Share - This indicates the annual dividend payment per share. If this space is
blank, the company does not currently pay out dividends.

Column 6: Dividend Yield - The percentage return on the dividend. Calculated as annual dividends per
share divided by price per share.

Column 7: Price/Earnings Ratio - This is calculated by dividing the current stock price by earnings per
share from the last four quarters. For more detail on how to interpret this, see our P/E Ratio tutorial.
Column 8: Trading Volume - This figure shows the total number of shares traded for the day, listed in
hundreds. To get the actual number traded, add "00" to the end of the number listed.

Column 9 & 10: Day High and Low - This indicates the price range at which the stock has traded at
throughout the day. In other words, these are the maximum and the minimum prices that people have paid
for the stock.

Column 11: Close - The close is the last trading price recorded when the market closed on the day. If the
closing price is up or down more than 5% than the previous day's close, the entire listing for that stock is
bold-faced. Keep in mind, you are not guaranteed to get this price if you buy the stock the next day because
the price is constantly changing (even after the exchange is closed for the day). The close is merely an
indicator of past performance and except in extreme circumstances serves as a ballpark of what you should
expect to pay.

Column 12: Net Change - This is the dollar value change in the stock price from the previous day's closing
price. When you hear about a stock being "up for the day," it means the net change was positive.

Quotes on the Internet

Nowadays, it's far more convenient for most to get stock quotes off the Internet. This method is superior
because most sites update throughout the day and give you more information, news, charting, research, etc.
To get quotes, simply enter the ticker symbol into the quote box of any major financial site like Yahoo!
Finance, CBS Marketwatch, or MSN Moneycentral. The example below shows a quote for Microsoft (MSFT)
from Yahoo Finance. Interpreting the data is exactly the same as with the newspaper.

Stocks Basics: The Bulls, The Bears And The Farm

On Wall Street, the bulls and bears are in a constant struggle. If you haven't heard of these terms already,
you undoubtedly will as you begin to invest.

The Bulls
A bull market is when everything in the economy is great, people are finding jobs, gross domestic
product (GDP) is growing, and stocks are rising. Things are just plain rosy! Picking stocks during a bull
market is easier because everything is going up. Bull markets cannot last forever though, and sometimes
they can lead to dangerous situations if stocks become overvalued. If a person is optimistic and believes
that stocks will go up, he or she is called a "bull" and is said to have a "bullish outlook".

The Bears
A bear market is when the economy is bad, recession is looming and stock prices are falling. Bear
markets make it tough for investors to pick profitable stocks. One solution to this is to make money when
stocks are falling using a technique called short selling. Another strategy is to wait on the sidelines until
you feel that the bear market is nearing its end, only starting to buy in anticipation of a bull market. If a
person is pessimistic, believing that stocks are going to drop, he or she is called a "bear" and said to have a
"bearish outlook".

The Other Animals on the Farm - Chickens and Pigs

Chickens are afraid to lose anything. Their fear overrides their need to make profits and so they turn only to
money-market securities or get out of the markets entirely. While it's true that you should never invest in
something over which you lose sleep, you are also guaranteed never to see any return if you avoid the
market completely and never take any risk, 

Pigs are high-risk investors looking for the one big score in a short period of time. Pigs buy on hot tips and
invest in companies without doing their due diligence. They get impatient, greedy, and emotional about
their investments, and they are drawn to high-risk securities without putting in the proper time or money to
learn about these investment vehicles. Professional traders love the pigs, as it's often from their losses that
the bulls and bears reap their profits.
What Type of Investor Will You Be?
There are plenty of different investment styles and strategies out there. Even though the bulls and bears are
constantly at odds, they can both make money with the changing cycles in the market. Even the chickens
see some returns, though not a lot. The one loser in this picture is the pig.

Make sure you don't get into the market before you are ready. Be conservative and never invest in anything
you do not understand. Before you jump in without the right knowledge, think about this old stock market
saying:

"Bulls make money, bears make money, but pigs just get slaughtered!"

Stocks Basics: Conclusion

Let's recap what we've learned in this tutorial:

 Stock means ownership. As an owner, you have a claim on the assets and earnings of a company
as well as voting rights with your shares.
 Stock is equity, bonds are debt. Bondholders are guaranteed a return on their investment and
have a higher claim than shareholders. This is generally why stocks are considered riskier
investments and require a higher rate of return.
 You can lose all of your investment with stocks. The flip-side of this is you can make a lot of money
if you invest in the right company.
 The two main types of stock are common and preferred. It is also possible for a company to
create different classes of stock.
 Stock markets are places where buyers and sellers of stock meet to trade. The NYSE and
the Nasdaq are the most important exchanges in the United States.
 Stock prices change according to supply and demand. There are many factors influencing prices,
the most important of which is earnings.
 There is no consensus as to why stock prices move the way they do.
 To buy stocks you can either use a brokerage or a dividend reinvestment plan (DRIP).
 Stock tables/quotes actually aren't that hard to read once you know what everything stands for!
 Bulls make money, bears make money, but pigs get slaughtered!