gabby stocks 101

Stock Market

for Dummies

A guide to the stock trade for those who don't know what a "hedge fund" is.

1 Define "Stock"

2 Stock Value

3 Dividends

Index

4 Brokers

5 Stock Exchange

6 Trading Process

7 Hedge Fund

8 Mutual vs Index Fund

Owning a stock means you have purchased a share (a small unit of stock) in a company, which is used to help fund them.

"Stocks"

NerdWallet

Stock value, or how much each share is worth, changes constantly due to supply and demand.

However, stock value isn't as simple as just a reflection of supply and demand. It depends on the predictions of investors as a result of a company's quarterly earnings projection.

Stock Value

Stock value is not necessarily indicitive of a company's actual value, just how much each share is going for.

Desjardins

Dividends

While not given to every stock investor, dividends are "payments a company makes to share profits with its stockholders." They're generally distributed on a company's common stock, generally in the form of cash or occasionally more stocks.

NerdWallet

Brokers

"A person or software platform that allows you to buy or sell stocks, bonds, options, and other securities. For individual investors, brokers are classified as either full-service or discount brokers."

The Tokenist

Stock Exchange

A stock exchange is when two investors trade their stock, either for another one or for money. These are done through exchange platforms either in person or online.

The Balance

Trading Process (On the Floor)

Step 2

Step 1

Step 3

The two agree on a price the price goes back through the communication line until your broker tells you the final price, and a few days later you recieve the confirmation notice in the mail.

The floor clerk alerts one of your floor traders, who finds another floor trader willing to sell the shares you are looking for.

You inform your broker what stocks you are looking to buy and how many, who then informs their floor clerk.

The Balance

Trading Process (Online)

Step 2

Step 1

Step 3

Wait for feedback from the broker on the trade's success in the form of an order summary, and decide to purchase the stock or not.

Find the one-five letter stock ticker (abbreviation) your broker uses for the company you want to invest in.

Set the parameters for the trade and submit it to your broker.

The Motley Fool

Hedge Funds

Investment pools created by a limited number of investors and operated by a professional manager to minimilize risk and maximize return. They are generally made up of very well off investors.

SmartAsset

Index Funds

Mutual Funds

1. Refers to a fund's investment strategy; Investments closely track a market index.

1. Refers to a fund's structure that follows a range of investment strategies.

2. Trading can and often does occur with others outside the fund

2. Trading generally stays within the fund

VS

3. Value of stakes do not flucuate throughout a trading session

3. Values fluctuate throughout a trading session

SmartAsset