Start Here If You Are New to Investing
Here are some of the investments that you can make: stocks, exchange traded fund (ETF), bonds, and certificate of deposit (CD.) The stock market is the place where all stock trades take place. A stock trade is an exchange between a buyer and seller of a certain number of shares of a stock for money.
The Stock Market
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There is the Dow Jones, Nasdaq, S&P 500, and Russell 2,000
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The Dow Jones is a way that the stock market is measured
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The Dow Jones is measuring the progress of 30 companies across the Nasdaq and New York Stock Exchange
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The Nasdaq mostly measures tech stocks
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The S&P 500 measures the 500 largest companies in the USA
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The Russell 2,000 is measuring medium sized companies
Stocks
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Big companies like Amazon have stocks. This means that you can buy tiny, tiny parts of the company. Stocks are like pizzas.
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Companies issue shares. Shares are the tiny pizza slices. You can buy those shares and sell them too. One share (or small part) of Amazon is a few hundred Dollars. There are millions of shares being bought and sold every day for Amazon.
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A stock’s volume is how much it is bought and sold in a day.
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Every stock has a ticker symbol. Amazon’s is AMZN. It’s easier to type AMZN than Amazon. Ticker symbols are like nicknames. People will understand both names. (but ticker symbols are used most of the time with stock buying and selling.)
Here are some types of trades that you can do with stocks:
1. Buy/sell on market: Use this to buy stock the most common way. You pay a certain amount of money for a small part of a company. People can bid for a certain number of shares of the stock and you end up selling your share(s) at the highest bid for the stock. There is also an ask which is the price that the owners of the stock want to sell their shares at, and when people buy on market, they end up buying their share(s) at the lowest ask price.
2. Margin: With this, you can borrow more money than you have and buy more stock than you originally could. There's just one problem. Sometimes there are margin calls. This means that you have to pay back the money that you borrowed (without margin calls, you don't have to pay back the money you borrowed, you just have to sell the stock.)
3. Short sell: Short selling is the exact opposite of buying. If you short sell a stock or buy a short of the stock market, you are betting that it will go down, instead of up. This works by borrowing shares from somebody else and immediately selling those shares. When you choose to, you buy back the shares and give it back to the person that you bought the shares from. You then make the difference. In my posts, if I say "this is a short" it means that the thing that I am buying bets that a stock/stock market etc. is going down. Inverse/bear/short are all ways to say that something will go down. (Ex. for Inverse: "This is a -2x inverse.") This means that if stock ___ is being shorted at a -2x inverse, it means that if stock___ goes down $1, the short goes up $2.
4. Limit order: If you place a limit order, you are setting a price that you want to sell or buy your shares at in the future. Here's an example: Let's say Apple stock is at $170 and you hope to sell you shares at $170.50---you can then place a limit order for $170.50 and once Apple's stock price reaches $170.50, the shares would automatically be sold for you at no lower than $175.50, but a big risk is that all your shares may not be able to be sold if the price dips back down. There is also a limit buy order, and it works the same way.
5. Stop order: A stop order is similar to a limit order, but let's use the same example as limits to explain it. Again, if Apple's stock is at $170 and you want to sell it at $170.50 and place a stop order right at that point, the stop order turns into a regular sell order right when the share price reaches $170.50. So there is a risk that your shares may not be sold (or bought if it's a stop buy order) at the price you want, since the order executes at whatever the highest available bid is (since it's a market order).
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There is also something called futures. You can buy one (or more) future contracts, which is basically a promise to purchase a specific stock at a specific price at a date in the future. For example, you can make a contract promising to buy AMZN (Amazon) on July 25, 2025 (random example) at $xyz. You can look up stock futures which predict how much the market will go up or down based on the contracts that have been made. I use Marketwatch.com to see stock futures and also to see some of the world's other markets.
Some stocks pay dividends. This means that the company gives money to the shareholders to reward them. It turns some of the stock gains right in to cash, so you don't have to sell the stock. If a stock pays $5 of dividends, it will probably drop $5 per share the day after the ex div date. The ex div date is the day that you have to hold a stock to receive the dividend.
Exchange Traded Funds (ETF's)
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ETF’s are easy to understand when you know stocks
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ETF’s are a group of stocks (or other kinds of assets), put together and sold for a single price
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Look at this ETF example which has shares of Verizon, Coca-Cola, and IBM
ETF's are traded just like stocks so any one of the trades above can be applied to ETF's too.*
*There are also mutual funds which are pretty much the same thing as ETF's except their price change is reported at the end of the day

Bonds/Certificate of Deposits (CD's)
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The government issues bonds.
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Bonds are also bought and sold like Stocks.
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CD’s are like bonds, but they are put out by individual banks. CD's are a form of investment that earns interest on a sum of money for a fixed period of time.
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Bonds are usually held for years instead of stocks which can be held for days. The amount of time that you are supposed to hold the bond to receive the full amount of money is already predetermined. The end of that is called maturity.
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The government uses bonds as a loan and they pay back the bondholders interest over time and they promise to pay you a certain amount of money by the bond's maturity.
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You can sell bonds and CD’s early, but you might not make as much money from selling it as holding it to the end.
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The bond prices move up and down based off of how much interest the new bonds are paying. Remember, they can move down in value too.
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You are guaranteed money with CD’s and bonds as long as the bank doesn’t fail and the government doesn’t run out of money.
Here's a quick rundown of how bonds' pricing works. They typically start at $100; but like options, you usually have to buy them in large increments. However often your interest is paid depends on the kind of bond you buy (it can be every 6 months or at the end of the option, which is called maturity). By maturity, you are paid back that $100 per however many units you bought in addition to the interest for the option. Like before, government (treasury) prices go up or down usually depending on how high the interest is being paid on new bonds that are issued (if new bonds are paying much higher interest than the bonds you own, then your bond is worth less. But if you don't sell the bond early and you just hold it to maturity, it will make difference to you, as you will still make back your initial investment plus interest). Government bonds are usually the most common kind, but individual companies can issue bonds, and they work the same way. One major difference is that there is a much higher chance that the company isn't able to pay back the interest they owe you and your initial investment than the US government, so one factor to how much corporate bonds' change in price is how risky the company paying you back is. Here's an example of some price changes in bonds (this will be corporate, but since the chance of not being paid back only really applies to corporate bonds, their price fluctuations are usually much more): Your bond starts at $100 and will pay you back 2% interest at maturity. Now let's say that the company starts to do really bad. The bond now drops to $90, and you choose to sell it at $90 because you don't believe in the company. Now someone else owns the bond at $90 when the company starts to do way better, and the price jumps to $95. They could choose to sell it for a $5 gain per unit, but instead they decide to hold it to maturity. They are now paid back $10 per unit (since they bought it at $90, but they are paid back the original investment of $100) in addition to that 2% interest, which means that their $90 turned into $102 at maturity. This is about a 13% price gain on the person's investment. Also know that some people may even buy a bond knowing that they will lose money on it (e.g. a bond starts at $100 paying 3% interest goes up to $105 per unit, and the investor chooses to buy the bond at that new $105 per unit price). They will probably do this if they just want a safe place to leave their money during an unstable time in the economy.
Bonds are also traded like stocks and ETF's. Again, everything above applies. But instead of the trades being done in the stock market, bonds have their own bond market where only bonds are bought and sold. CD's are trickier though. You can't sell CD's if they are bought directly from a bank, but you can sell them if it is brokered through someone else.
