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The Basics - Investing FAQ for New Investors

The Beginner's Corner provides answers to frequently asked questions (FAQ) posed by new investors such as, "What is the Dow Jones?" and "What are stocks?".
Surviving a Roller Coaster Stock Market
Stock market volatility can be a problem for investors that don't have experience in the financial markets. These tips and tricks can help you survive stock market volatility and reduce your retirement risk.
How Do I Actually Make Money From Buying Stock?
How does an investor actually make money from buying stock? The return an investor makes comes from dividends and an increase in the price of the shares.
Are You Gambling or Investing?
Some people treat Wall Street like a giant casino where luck, and not skill or analysis, is the determining factor in who succeeds and who fails. How do you know if you are gambling or investing?
Does a High P/E Ratio Mean a Stock is Overvalued?
Does a high price to earnings ratio, or p/e ratio, mean a stock is overvalued? Not always. Sometimes a high p/e ratio can be justified if the investor is certain as a result of his or her analysis that the cash flows will increase enough to result in a higher earnings yield in the future.
Know Your Opportunity Cost
As an investor, it is important to know your opportunity cost when building your portfolio. Opportunity cost can be defined as the expected yield of the next best investment available to you.
The Three Primary Types of Financial Capital
There are three categories of financial capital that are important for you to know when analyzing your business or a potential investment. They each have their own benefits and characteristics. They include equity capital, debt capital, and specialty capital.
What is Stock?
Find out what stock is and why companies issue it.
What is a Ticker Symbol?
The I.D. tag for stocks, learn what ticker symbols are and how they can help you research your investments.
Why Stocks Go Up and Down
The stock market is essentially a giant auction - only instead of antiques and heirlooms, it's ownership in businesses that's up for grabs. Find out why the stock market fluctuates.
What is the Dow Jones?
No matter who you are, you've heard of the Dow Jones. It's perhaps the most followed index in the world.
What is the NASDAQ?
The NASDAQ was the star of the bull market in the '90s. As a general rule of thumb, it is where most technology stocks are traded.
What is the S&P 500?
The benchmark that all investments are measured against, the S&P has long been an important indicator on Wall Street.
What is a Broker?
If you are going to invest, you almost always have to have a broker. Just what do they do, and why should you pay them? Find out here.
What are Money Market Accounts?
A checking account meets a bond meets a savings account. Money markets are easy ways to save money and earn a higher rates of interest.
What is a Dividend?
Some stocks pay dividends. This means that for every share you own, you are paid a portion of the company's earnings.
What is a Blue Chip Stock?
A few examples of blue chips are Wal-Mart, Coca-Cola, Gillette, Berkshire Hathaway and Exxon-Mobile. Find out why blue chips are favorable among investors.
What is a Stock Split?
When a stock splits, it seems like everyone gets excited. Discover what stock splits are and their effect on a company!
What is a Reverse Stock Split?
A reverse stock split is used to avoid delisting of a corporation's securities on a stock exchange. Following the Internet bubble, investors saw a flurry of reverse stock splits.
What are Penny Stocks?
They may be cheap, but they are high risk. Read about the appeal and risk of these low-priced stocks.
What is a Certificate of Deposit?
CD's are one of the oldest and most conservative investments around. Get the low down on them.
What are Commodities?
High-Risk, High-Dollar investments, commodities are not for everyone. You can lose your shirt - or become an instant millionaire.
Beginner's Corner
What are stocks? How do they work? What is the Dow Jones? How do bonds make money? If you need simple questions like these answered, the Beginner's Corner is the place for you! Drop in to learn all the basics.
Do Not Despise the Day of Small Beginnings
Feel discouraged about investing small amounts? This short story about the success of Coca-Cola common stock should lift your spirits.
What are the Summer Doldrums?
The summer doldrums is a phenomenon in the stock market where trading volume falls substantially as a result of investor psychology. Typically, the summer doldrums are a result of money managers spending more time on vacation and outdoors rather than inside reviewing financial statements and buying or selling stocks.
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