I remember when I got my first paycheck. I was sixteen years old and I had been working towards earning enough money to buy a pair of used Jordan 4’s on eBay. Back then I was unaware of what it meant to invest my money, or even save it for that matter. I didn’t even have a bank account; I would just stuff my money in an old shoe box in my closet. I often think of how much money I would have now if I had saved all my childhood earnings and eventually learned how to invest it. We all have thoughts like these, but it's important to remember that it's never too late to learn how to invest. In this series, titled “Investing 101”, the Business and Economics Committee at On Century Avenue will give you a comprehensive guide on the steps you need to take to learn how to invest in the stock market.

It is important that you build a strong foundation before actually investing. Investing in the stock market can seem very intimidating, especially if you’ve never been exposed to something like it. Keep in mind that everyone was once a beginner, and in order to deepen your knowledge and understanding, you have to be open and comfortable to learn something new. Below I’ve included two methods that I think are the best ways to begin your investing experience in the US stock market. So here are a few ideas for how you can start familiarizing yourself with market terminology and logic:

Watch or listen to stock market channels

The US stock market opens every weekday at 9:30 AM and closes at 4:00 PM, so throughout the day TV channels like CNBC are covering market movements. It's important to have a general understanding of the common terminologies used in the stock market so that you can effectively communicate, listen to advice, and comprehend market research. CNBC has a plethora of shows that air throughout the day, such as Mad Money, Squawkbox, Squawk on the Street, Fast Money, and Squawk Alley that cover daily market movements and trends. My advice would be to listen and watch these shows throughout the day or simply have them on in the background when you’re doing your daily routine. CNBC even has an app that you can download on IOS or Android that will play CNBC Radio on your phone. CNBC often gives the viewer/listener the “why and what” of the stock market, meaning that they provide the explanations and reasonings as to why a stock reacted a certain way and what caused it. As you begin to expand your market vocabulary, you’ll feel more comfortable and confident with learning the ins and outs of the market.

Join a MarketWatch tournament

MarketWatch is a great website to utilize when learning how to invest. Not only does MarketWatch provide a range of different articles from various news outlets, it also allows you to join tournaments that simulate a real investment experience. In a MarketWatch tournament, every contestant is given a certain amount of money, let’s say $200,000, to invest in the real US market. Although the money isn’t real, you can use it to experiment with investing in certain sectors/stocks within the market. When I first started learning about investing in the stock market, I used MarketWatch as a way to apply my knowledge without bearing the consequences of actually losing money. MarketWatch affords you the opportunity to make risky plays that you might not normally do with your investment capital. MarketWatch is free and the investment simulation is a fun way to start developing confidence within the market.

Join a tournament through this link: https://www.marketwatch.com/game

I advise that you spend a few weeks watching CNBC and playing in a MarketWatch tournament before you actually begin to invest. The CNBC channel is only one click away on your computer or TV, and a MarketWatch tournament will give you the opportunity to employ these skills within the daily stock market. Next week, I will publish another “Investing 101” article that will break down how the stock market works, how to set up an account to invest, and which stock sectors I believe are the best for beginners. Below I’ve included a Market Terminology list that you should know before investing and reading the next article. I did not include the definitions in the list because I think researching the terms will help you remember them. Stay tuned for more!

Market Terminology:

Stock

Stock Symbol

Share/Shareholder

Sector

Bear Market

Bull Market

Volatility

Yield

Portfolio/Portfolio Diversification

Blue Chip Stocks

Pink Sheet Stocks (Penny Stocks)

Bid

Day Trading

Stock Earnings (Commonly referred to as just ‘Earnings’)

Average Price Per Share/Moving Average

Dollar Cost Average

Quarterly/Annual Report

Dividend

52 Week High/Low

Initial Public Offering

FDA Approval

This article was written by Grant Kind, currently based in Philadelphia, Pennsylvania. Please send an email to [email protected] to get in touch.Photo Credit: Chris Hogan, https://www.chrishogan360.com/investing/investing-101