There is no guarantee that you will make money in stocks. Making your investments pay off takes a lot of work. You need to follow the financial news, use the market indices such as the Dow Jones Industrial Average , S&P 500, and the NASDAQ Composite to watch market trends, and thoroughly research companies you want to invest in.
Ways to invest in the stock market
There are many ways to invest in the stock market. A few common ways are listed below.
Instructions: Click each way to invest to learn more about it.
Buying shares in a company
Risks and rewards
Money that is invested in the stock market can have a great potential for growth but stocks can be risky because their value can change from day to day. There are no guarantees of a profit.
Research before you invest
- Research is critical to investing success.
- Research before investing. Most brokerages offer research and financial news in addition to stock quotes.
- Base your decisions to invest on facts, not emotions.
- Be as objective as you can about the risks and potential rewards.
- View “stock advice” about investments with skepticism. Do your research.Recent theoretical studies have already commenced the first step to link the financial market and
the rate of economic growth; it is proposed that higher per capita income may affect many aspects of
the economy and stock market performance. Gurley and Shaw (1955, 1960 and 1967) argued that
financial development is a positive function of real income and wealth. This study supports the
quantitative work of Goldsmith (1969) who discovered that, in most of the 35 countries investigated,
both developed and developing, the ratio of the financial institution to GDP tends to increase with
higher real income and wealth. This relationship between growth and financial system size is further
supported by more recent evidence from the World Bank (1989). Much of the research within
empirical studies concurs that finance is strongly associated with economic growth rate.
Financial markets are today classified as bank-based or market-based systems. This division can be
further exemplified by the Anglo-Saxon market-based models which are capitalist economies and
allow for private investment and private ownership and the other, largely exemplified by Germany,
which is the bank-based model that has been practised more widely by Eastern European countries.
These latter are centrally-planned or, to be politically correct, communist economies (Hall and
Soskice, 2001). The UK and US are market-based as these countries have similar long-term growth
. Throughout the world, the type of financial model practised by sovereign countries reflects the
type of government as a regime in power. Many, Eastern European, Middle Eastern and African
countries, including Libya, have practised socialism for a long time. However in the light of recent
trends, and under the direction of the IMF and World Banks, many countries are now reforming their
economies and gradually adopting capitalism, largely as a result of the failure of socialism and
particularly in order to rescue their economies. In this context, the World Bank (1994, 1989) has
argued for the establishment and promotion of stock markets in developing countries in line with those
existing in developed countries.