Difficulty:
Easy
Cost:
$1-$50
Average rating:
While there are literally hundreds of books and classes out there that promise they can teach you how to triple your money in under a year in the stock market, it is well-known that these are scams. How, then, can you find an honest and accurate way to learn about the stock market? Again, there are many options to sift through. This article will give you the three easiest, cheapest, and fastest ways to learn about the stock market. Be sure to broaden your horizon by learning about the stock market from all three perspectives, and finding your own ways once you have exhausted these resources.
Step 1:

One of the fastest and easiest ways to learn about the stock market is to visit legitimate educational websites on finance and investing. There are many sites that are devoted to teaching people about the stock market. These sites offer articles and tutorials that explain how the stock market works, how to invest, and how to master financial lingo. By visiting many different sites, you can gain an appreciation of the market from multiple aspects. Some of these sites include The Motley Fool, Investopedia, and my website, TheFinancialHandbook.

Step 2:

Another way to learn about the stock market is to read books, magazines, and newspapers about the market. There are many respectable periodicals including the Wall Street Journal, Barron's, BusinessWeek, Forbes, Fortune, and Bloomberg Markets. In addition to publications on what is happening currently in the market, there are many classic books that hold a great deal of wisdom and theory on the market. Some of these classics include A Random Walk Down Wall Street, by Burton Malkiel; The Intelligent Investor, by Ben Graham; Understanding Wall Street, by Jeffrey Little and Lucian Rhodes; and One Up on Wall Street, by Peter Lynch.

Another source for some wit and wisdom on the market comes straight from Warren Buffett himself at http://www.berkshirehathaway.com/letters/letters.html. This is a page on Berkshire Hathaway's website that hosts all of Buffett's annual shareholder letters dating back to 1977. Reading these letters will allow you to peer inside the mind of one of the greatest investors in the world.

Step 3:

The safest way to learn about the stock market is to contact a professional financial advisor. Any quality financial advisor will take time to sit down with you and explain how the stock market works. However, make sure that your advisor is credible; ask for their credentials and any designations they hold. You can also check their background through FINRA's AdvisorCheck to see if they have anything on their record. Once you have found a qualified financial advisor, ask for an explanation of the stock market. Also, this is the best time to ask questions. It is often hard to find the answers to certain questions in books, but it is much easier if you can have a dynamic conversation with a financial professional.

Learning about the stock market is really quite simple. Start off by doing your own research and reading financial websites, books, newspapers, and magazines. Also, start searching for a financial advisor. When you have found an advisor that you are comfortable with, ask them to explain to you how the stock market works. Combining these three things should allow you to see the market from different perspectives and gain an appreciation of how the market really works.
Useful Links:
Investopedia
The Financial Handbook

Comments

Sometimes, for some of us, learning the ways of the market is to be engaged in it, i.e. a trial portfolio.

Mary Norton's picture
By Mary Norton 1 year 17 weeks

    Great Point! That should be Step #4. Starting a fictional portfolio is definitely a great way to learn about the market. Before I ever invested real money, I created an Excel spreadsheet to simulate a fake portfolio and track the performance. If you aren't familiar with Excel, there are many websites that have fantasy portfolio "games" to get you to interact with the market using real-time data (typically delayed 20 minutes). Two that I use are at the websites listed above: Investopedia and Fool.com.

    The Investopedia Stock Simulator starts you off with $100,000 and lets you buy, sell, short, and cover equity and option positions, set limit/stop orders, and even participate in and create competitions against other investors. From their website: "The Investopedia Stock Simulator supports equity trading (all U.S and Canadian exchanges), option trading, limit/stop orders, margin-like functionality, short selling and adjusts for most corporate actions (splits, dividends, mergers etc), allowing you to test virtually any trading strategy without risk." Register for free at: http://simulator.investopedia.com/

    Another interesting fictional stock picking game is on Fool.com. However, instead of buying and selling stocks, you have to decide how you think the stock will do relative to the S&P 500. When you decide to rate a stock, you have to chose whether it will outperform or underperform the market, and can even explain why you made your choice so that others can read your opinion. After the rating is submitted and applied to your account (within 20 minutes if the market is open), you will be able to track the performance of your stock versus the S&P 500. This is helpful because while you may be down 5%, you can still be beating the average if it is down 10%. You will also be able to see your ranking compared to the other 60,000 members. Register for free at: http://caps.fool.com/

    Both of these websites provide engaging, yet different ways to view and learn about the stock market, and go much more in-depth than I can explain here. For most people, starting a fictional portfolio before a real one will be extremely beneficial. If you would like to be involved with the market and test your ideas, yet not risk any money, starting a fictional portfolio really is the way to go.

    By Travis Engebretsen 1 year 17 weeks