Stock Market Basics for Beginners

The stock market helps to invest in various financial instruments and also guarantee liquidity. The financial market consists of several different instruments and is classified according to the terms of the reimbursement of these instruments. Invoices and securities are the two main instruments in the market. Invoices ensure that the owner returns a fixed amount in the future, and the securities pay a certain amount in accordance with the refund received. Other types of securities are preferred shares and convertible bonds and are called fixed yield instruments.

Knowledge of the stock market

Those who invest in the company’s shares will become its owners. Their influence on the decision making in the affairs of the company depends on the amount of shares they have. Investing in stocks requires some knowledge of the fundamentals of the stock market, as well as about different groups or types of shares. In the stock market, the shares are divided into certain groups according to their effectiveness, as follows:

INCOME: These types of shares are shares of companies with a high and stable profit. They regularly pay dividends to shareholders.

RISKS OF GROWTH: These actions are growing faster, mainly due to the policy of the reinvestment management of the company for further development and modernization. Regular dividend payments are not available in such companies.


BLUE CHIPS: the first line shares will have a record of constant growth and a continuous record of dividend payments to shareholders. It is believed that they have the best investment potential to obtain long-term benefits.

CURRENT RESERVES: the prices of these shares will be stable, even if the market decreases and minimizes investment risks. Its effectiveness will be useful for investors during the collapse of the market or the economic boom. Mutual funds are widely invested in this type of actions.

Invest in the stock market

By investing in stocks, minimal knowledge about the effectiveness of stocks and the fundamentals of the stock market will help you get the most out of your investments. Acquire knowledge about the types of shares, the financial condition of the company and the category of shares before deciding to invest in shares of a particular company. Dividends depend on the performance and profitability of the company.

An ordinary company does not guarantee regular dividends. They will pay dividends in those years when they bring some good profits, and they can share the income among the shareholders. The price of ordinary shares depends on three factors; Annual dividend size, dividend growth rate, and discount rate.

When investing in stocks, many factors must be understood in advance for these efforts to succeed. First, make a complete study of the company, including its statement of profit and loss, balance sheet, cash flow, distribution of profits among shareholders and how to distribute the company’s salary. To do this, you can hire a financial expert or a broker. Only after receiving enough information should you make an investment. The duration of the action is also critical, and its adoption also requires some expert knowledge. Find out here about traded securities.