What is Investing in the Stock Market?

Investing is simply trying to make your money grow for you.ne way to invest is investing in the stock market. When you purchase a stock, you actually purchase part ownership in a company. Everyday hundreds of transactions are made in the stock market, but how much exactly is being traded? According to HSBC, citing data from the Bank of International Settlements (BIS), $5,100,000,000,000 is traded daily - that’s trillion with a “T” (Capital, 2021). That is a lot of money, and you may be asking yourself, how do I get a piece of that action?

A key skill that one must have when deciding to invest in the stock market is when to sell or hold on to a stock. Professor of Economics from the University of Illinois, Ali Toossi, said, “it is a Prisoner’s Dilemma as everyone is motivated by self-interest to sell and make a profit, but also selling stock hurts the value of the company.” When a stock falls in value there are a few choices that an investor is faced to make, an investor can hold out (leave the stock alone), buy more stock (people buy stocks low and hope they will rise again), or sell the failing stock and cut one's losses.

According to the wealth manager at Morgan Stanley, Sam Valeo, “the best stocks are the ones that you can hold for life.” Young investors can benefit from having a long-time to invest before their retirement. Begin exploring investing options through the benefits office at your employer, through your financial institution or other professional advisor as a young professional.

See the Investing Dictionary at right & the Investing Basics article by Moises Sanchez for more information about how diversification and mutual funds help many young investors to reduce risk.


Sources:

https://www.nerdwallet.com/article/investing/how-to-day-trade-safely

https://newventuretec.com/stock-market/how-much-money-is-traded-on-the-nyse-daily.html#:~:text=Reuters%2FSteve%20Marcus%20If%20you,trillion%20with%20a%20%E2%80%9Ct%E2%80%9D.