Understanding investment basics is crucial for building long-term wealth. This guide covers fundamental concepts every investor should know.
The stock market is where shares of companies are bought and sold.
When you buy a stock, you're buying partial ownership in a company.
Markets are influenced by:
• Company performance and earnings
• Economic conditions
• Market sentiment
• Global events
Common investment vehicles include:
• Stocks: Ownership shares in companies
• Bonds: Loans to governments or companies
• ETFs: Baskets of stocks trading like a single stock
• Mutual Funds: Professionally managed investment pools
Each type has different risk levels and potential returns
Key principles of risk and return:
• Higher potential returns usually mean higher risk
• Diversification helps manage risk
• Long-term investing typically reduces risk
• Regular investing (dollar-cost averaging) can help manage market volatility
Ready to start investing? Here's what to do next:
Disclaimer: This guide is for educational purposes only and should not be considered financial advice. Always consult with a qualified financial advisor before making investment decisions.