ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

An Introduction to Stock Market Investing

Updated on July 13, 2013
"Stock Quotes"
"Stock Quotes"

An understanding of the basics is very important for future development. A strong foundation is the key component of a enduring construction.

World's leading investor, Warren Buffet, has said that he still sticks to the basics of investing when he is making an investing decision. The basics of investing is the technical analysis of companies' performance.

Learn from the best in the business: Warren Buffet

Stock Market Terms

  • A Stock/Share

A stock is the smallest unit of ownership of a company. Owning even a single stock/share of a company makes you an owner of the specific company. Each stock has an value. And thousands of these shares make up the total value of the company.

  • Stock Market

A market where the said stocks are traded among buyers (investors and traders). Also known as the Stock Exchange. There are two stock markets, namely "Primary Markets" and "Secondary Markets".

  • Primary Market

A market where stocks that are issued by a company for the first time, usually during establishment of the company or 'listing' in the stock exchange. The stocks will be issued at par value.

  • Secondary Market

A market where already issued stocks are traded between investors and traders in the stock market. All stock trading that occur after the initial listing are taken under the Secondary Market.

  • Par Value (of a stock)

This is the value of a share that has been predetermined by the company that is used as nominal measure of value of a stock. Also known as face value and nominal value.

  • Market Value (of a stock)

This is the value of a stock at which it is currently being traded in the stock exchange. Market value can either be higher or lower than the par value of the share depending on a large number of factors, mainly affected by the profitability/performance of the company.

  • Investment Portfolio

An investment portfolio is a collection of investments. When you invest your money in the stock market, the best option would be to divide your money into a few (4-6) companies' stocks so you could minimize the overall risk of your investment. It's highly unlikely that all 4-6 companies share price will drop, so you can mitigate your losses from 1-2 companies with the gains from other companies.

If you really want to be successful at either investing or trading, you need to know how to analyze the performance of each company and predict the future growth.

Investing or Trading?

There are two ways you can engage with the stock market. Invest or Trade. Yeah, they are quite different concepts altogether. Let's see how.


Investing is rather a long term commitment. You invest in a company (stocks) with an intention of holding the investment for sometime, some longer period than just weeks or months. There is no hard and fast rule as to the exact time period. But usually investing can be usually a commitment for a year or more. But this could extend to many years, even 20-30 years too.

Investors like Warren Buffet are capable people of predicting the future performance of a company by analyzing it's performance data now. And they usually target a long term investment spreading over 5-10 years. Again, there are no standards in this regard.


Trading, however, is rather short term in nature. Here the intention of the buyer will be to buy the stock now and sell it again as soon as possible with a predetermined profit margin. Trading can expand up to a week, a month, but rarely up to a year. On the other hand it can be as short as a few minutes transaction, depending on your talent and luck.

Which is better? That is not really a question I can answer. It should be determined by you and your intentions. If you want to make a quick buck, trading would be the option, but it has it's own share of risks. If you are a novice into the stock market, the best choice would be to get hold of a stockbroker to manage your investment for you. They will decide on the best investments for your share of money and invest them in an investment portfolio.

Online Stock Trading software can give a you a wealth of information, from price quotes, increases and decreases in prices, price highs and lows, price trends, graphs, charts and analysis tools all in real-time.

Conventional Stock Trading vs Online Stock Trading

Conventionally stock trading could happen via your stock broker. Not 'could', but that is the only way. You do not have a direct access to your investments. You must be connected with a stock brokering firm which will assign you a stock broker who will advise you and control your money for you. Since you do not have a direct access to your investment, the stock market or the invested companies, a stock broker is a must. For the services provided, a stock broker charges a small percentage (usually less than 5%) out of the transaction value (only if you do a transaction).

On the other hand, Online Stock Trading is very user friendly and dynamic and growing in popularity with the popular use of the Internet. Also most stock brokers are offering the facility to engage in Online Trading at the comfort of our homes. There are special software designed to connect the users to the stock exchange of their respective countries in real-time. And through these software the users are able to directly access their investments and make any adjustment they wish. Here, the involvement of the stock broker is minimal. His duties will limit to advising you and managing deposits and withdrawals of money to/from your investment portfolio and carry out any instructions given by us. Still the stock broker is capable of managing our portfolio for us, in any case we decide to give up online trading.

Usually the stock brokering firms provide the online stock trading software free of charge when you become an investor with them.

Interface of the EclipseTrader software
Interface of the EclipseTrader software | Source


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)