Watching the Stock Market Can Be Fun
Where Bulls and Bears Hang Out
Greenspan: Head of the Fed
You don't have to be rich to follow the ups and downs of the stock market, but -- and I can only guess -- it helps. I feel confident in making this assessment despite the dreary fact that I am not personally wealthy (This could be construed as an understatement.)
While it can't hurt to have some foundation in business finance, you might find it's a lot easier to get a handle on the markets now than ever before -- thanks to the information explosion of recent decades.
Data Easily Available
If you're interested, you can get up-to-date information (aside from formal education and text books) through business magazines and newspapers, and from seminars offered by brokerage firms, banks and other financial institutions.
And, if you can pull yourself away from Oprah, Donohue, Sally, et al (what I prefer to call "the afternoon sleaze shows,") you may find it interesting to tune in to one of Cable TV's more worthwhile offerings: CNBC. The station provides an all-day diet of business news, interviews, special reports and analysis, along with up-to-the-minute Big Board and NASDAQ stock quotations.
If you'd like an intellectual challenge -- or a financial challenge if you have dollars to invest -- you might want to take a little time to follow the fortunes, and misfortunes, of the Fortune 500. You just might find them fascinating, as I have.
Complex Market Gyrations
Novice stock watchers, unless I miss my guess, tend to begin by following the ups and downs of one or more individual stocks. It doesn't take long too find out that the market's gyrations are a bit more complex than one might have thought on first impression.
While watching the market always keep in mind that investors buy stocks for one overriding purpose: to make money!
Individual stocks do not always behave the way one might expect. They often shoot up when you expect them to go down and, conversely, tumble when you expect them to go up. But never fear professional stock watchers will always have a scenario ready to explain any inexplicable moves.
Perhaps the most perplexing circumstance: A company reports dramatically improved earnings, but the stock takes a nosedive. You're left shaking your head, wondering: Isn't earnings what it's all about?
It ain't necessarily so.
Faceless analysts appear out of nowhere, it seems, to explain. Despite skyrocketing earnings, prospects for continued lofty results are not so great.
Outside Forces Come Into Play
Or, perhaps, outside forces are coming into play: "Market conditions" are putting a curb on growth, interest rates are trending higher, the dollar is weak (or strong), tax increases are expected, the deficit is out of control, international competition is hurting long-term prospects for profits.
Or, maybe it's just something somebody said. Alan Greenspan, for instance, or, maybe, Lloyd Bentsen.
It's fun to try to figure out what the market's doing; and it can be profitable for anyone with a few dollars -- and a yen for risk.
The best advice is offered free by one brokerage house in its TV commercials: Buy low, (and, by inference,) sell high.
How the Stock Market Works -- for Dummies
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