Stock Market Basics: What Beginner Investors Should Know
The stock market isn't like your grocery store: To buy and sell stocks, you must shop through a licensed brokerage, which makes trades on your behalf. Bull markets vs. bear markets Neither is an animal you’d want to run into on a hike, but the market has picked the bear as the true symbol of fear: A bear market means stock prices are falling — thresholds vary, but generally to the tune of 20% or more — across several of the indexes referenced earlier. Bull markets are followed by bear markets, and vice versa, with both often signaling the start of larger economic patterns. In other words, a bull market typically means investors are confident, which indicates economic growth. A bear market shows investors are pulling back, indicating the economy may do so as well. The good news is that the average bull market far outlasts the average bear market, which is why over the long term you can grow your money by investing in stocks. The S&P 500, which holds around 500 of the largest s...
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