Stock Market 101

Thanks to my daily dose of Oprah she had a financial expert from CNN named Maria Bartaroma who spoke on the subject of stocks. I was able to learn some things below that may be helpful introducing you to the Stock Market.

Stock - ownership of a company

Nasdaq - electronic systems brokers and dealers buy and sell stock. Basically it's like ebay. It stands for National Association of Secure Dealers Automated Quote. People use the Nasdaq to compare stocks from a year ago.

FICA - Federal Insurance of Constitution Act. It requires employee and employers to withhold paycheck hold in fund to pay for social security and retirement....with the combined percent of 15.2% from the employer and employee to pay for when they retire.... If they are self employeed they have to pay the whole 15.2 % of their own money. If one does not live to collect that, their heirs may get the money but a lot of paperwork is involved so there is much controversy about the legitimacy of the FICA.

Stock Market - market of stocks where companies that trades giving individuals opportunity to have ownership to own companies. Stocks will trade and their prices changes minute to minute from 9 - 4pm depending on demand on the stock.

Why is it so loud trading floor?

Guys are yelling because info is moving quickly.

Example:

You can be at home.. say you want to buy a stock and call your broker. You say, "I want to buy a million shares of IBM" Your broker goes to where they are selling shares of IBM....

He’s gotta get someone who will sell it to you for your specific price He will then tell him, "I want to buy IBM...but I’m not paying more than 70 cents a share..." Why is he in a rush and loud? ...Because if someone gets infront of your broker...that stock may turn into 72 cents a share which is above the price you were asking for...and if it becomes 75 cents a share then the broker may be fired!

The way it works in basics =

You send money to person selling u a stock that's it and tradings are offered made, and deal is done and then your stock will either rise or fall.

Great Strategy to Know for the Stock Market:

Warren Buffet has a strategy.... he says,

"Buy well known quality market leaders like Coca Cola, American Express at good prices..."

For instance if you want to buy a sweater... at $20 and there's the same shirt else where for $100 then don't get it. Get good companies at good prices.

Three ways Maria Bartaroma says can help you out financially is:

1. Open a savings account / CD at low rate but it’s / start children out saving young with programs like Christmas clubs for kids.

2. Everyone must have a 401k, or IRA.

3. Buy stocks...with extra money

Mistakes to money manage is:

Watch out for spending too much on dinner, and bad habits like Starbucks or cigarettes.

Posted: 1:32 a.m. EST January 20, 2006 by Anne Meesriyong