TSME #027: The Money Language

In the 30's, 40's and 50's, there was no internet. The majority of people didn't even own televisions. This meant that only the very wealthy had access to the stock market and to people who could get them in and out of stocks. Because of the limited information, even those who had access mostly stayed with the names and companies with which they were familiar. The main exceptions were people who actually worked on Wall Street. In the 1990's the technological revolution began. Internet connection became dominant and leveled the playing field of the stock market. Now everyone has access to Wall Street. Tyrone's favorite website for researching the stock market is yahoo.com/finance. He uses this research tool to look at a company's profile, 5 year chart, top-line revenue, major shareholders and more, all before logging into his brokerage account to actually execute his trades. Yahoo is great for research but it does not give you strategies, trades, and ideas for actually making money in the market. It also does not explain the language and vocabulary of the stock market, which can make beginners feel intimidated. Tyrone breaks down stock market terms so that you can speak the money language with fluidity: Bull Market: refers to the rising of most stocks, the general forward movement of the stock market Bear Market: refers to the general decline of the stock market Index: a listing of certain stocks, generally used a measurement of the value of a section of the stock market to determine the overall market's current strength Examples: Dow Jones Industrial Average – The top 30 stocks in the US stock market Standard and Poor’s 500 (S&P 500)- The top 500 stocks in the US stock market Divergence: happens when the DOW Jones is up but the S&P 500 is down, or vice versa Allocation: the way an investor divides his/her money into different portfolios and stocks for different purposes Building a Position: Purchasing shares of a Dow or growth stock and buying more shares when the stock price increases in small increments Float: The amount of shares in the public domain to be traded on a daily basis Dividend: As a shareholder, your share of a company's profits distributed generally on a quarterly basis   To continue your financial education, visit WITradeSchool.com!