How would you simplify understand how the stock market works?
(I have tried years to understand it and I am still lost. Not trying to sound like a dummy here but it seems so complicted to me.)
Answer :
No, the market is not complex at all. Just the maturity of thinking behind it is humongous.
Think as if stocks is just your own business. You first start with your own money. But then the business grows. You start making profits. Then you borrow money. First you will borrow on interest only. Later people will be willing to trust you and share your risk for profit just like you would be doing. You want to give away your risk and in exchange for profits. The market is about exchanging risks for returns.
As measuring risk is complicated it just keeps getting complicated. To add oil to the fire, We have an array of economic parameters, Industries and investments. If we try to look at the Stock market analytics as a measure of performance, risks and ability to forecast you will be able to read well into them.
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I read into your question as how do you want to get started with investments, hence the earlier answer.
I’d strongly suggest, don’t do it yourself. I have burnt my fingers. Use a Financial Planner.
But if you still want to do it yourself I have some resourses and pointers you can check out.
Best regards,
Posted: August 6th, 2010 under US Stock Market.
Tags: stock market works