Introduction to Stock Market Investing | A. J. Smith | Skillshare

Introduction to Stock Market Investing

A. J. Smith, Founder

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9 Lessons (3h 43m)
    • 1. Stocks 01 Introduction

      6:15
    • 2. Stocks 02 Stock Market Investing Overview

      21:35
    • 3. Stocks 03 Tips and Tenets

      26:25
    • 4. Stocks 04 Investing Terminology 101 Part 1

      38:17
    • 5. Stocks 04 Investing Terminology 101 Part 2

      36:05
    • 6. Stocks 05 Investing Prep Work

      18:59
    • 7. Stocks 06 Investing Strategies

      33:05
    • 8. Stocks 07 Investment Account Navigation Demo

      20:54
    • 9. Stocks 08 Final Tidbits

      21:04

About This Class

There are millions, even billions, to be made in the stock market. Learn how to make passive income and potentially increase your wealth by hundreds, thousands, or possibly millions of dollars through stock market investing. Take a passive or automated approach to increasing your money and wealth through one of the oldest, and proven, mediums of wealth building. Through this material, you will learn how the stock market works. And, most importantly, you will learn how to implement tools, techniques, and a mental acumen to make the stock market work for you.

DISCLOSURE: The author of this content is not a licensed stock broker, stock advisor, nor a certified financial planner. The information provided in this lecture, and associated material, products, and services, is for informational purposes only. It should not be considered legal or financial advice, but a means to understand how a layman's approach to making money through the stock market. All consumers of this content should consult with a financial advisor, licensed broker, attorney or other professional to determine what may be best for their individual needs.

Transcripts

1. Stocks 01 Introduction: Hello, everyone. This is a J. Smith, and welcome to an introduction to stock market investing Before we begin. I do want to make a disclosure, and that is I am not a licensed broker stock adviser. Nor am I a certified financial planner. The information provided in this lecture and associated materials products and services is for informational purposes on Lee. It should not be considered legal or financial advice. You should consult with a financial advisor, license broker, attorney or other professional to determine what may be best for your individual needs. I nor my brand a. J. Smith 3 65 dot com make no guarantees or other promises as to any results that may be obtained from using this content. No one should make any investment decision without the proper consultation of, ah, license for certified financial advisor or through his or her own research and due diligence to the extent possible and permitted by law. A. J. Smith 3 65 disclaims any and all liability in the event. Any information, commentary, analysis, opinions, advice and or recommendations proved to be inaccurate, incomplete, unreliable or results in any investment or other losses. The content contained one or made available through this lecture through the lecture and through a J. Smith 3 65 dot com is not intended to and does not constitute legal advice or investment advice. Thus, no attorney client relationship is formed. Your use of this information is at your own risk. I have to make that disclosure statement because I'm not licensed. What I am is a recreational investor who has had success in the market. The information that I'm providing to you in this lecture is material that I have created. I'm a layman who invest in the market recreational, e like I said, and as a means toe, add additional streams of income toe my portfolio. So through the many years of investing, I have made money in the stock markets have also lost money in the stock market. But overall, I have returns of net gains on my initial investment and have been very satisfied with my investment strategy. In this lecture material is providing you with a layman's approach to stock market investing, and although it has helped me to better understand the market and investing in it, your results may vary for mine. You may do better. You may do worse. We don't know, Um, and again, I must stress that you are taking an unlicensed layman's advice at your own risk. So now that we've gotten that out of the way and before we actually jump into the material , just let me give you a little bit of background about myself again. My name is A. J. Smith. I am a graduate of Harvard University and the University of Maryland. I have a bachelor's in business administration and a master's of science and management and management information systems, respectively. So I'm also the founder of Baca Strategies, and we can be found at www dot b a. Q a strategies dot com. We are business analysis and quality assessment consulting firm, and I am the founder of A. J. Smith 3 65 dot com, which is a wealth building media platform that concentrates on well building the real estate, securities investing and professional development, which is three of the things that I do. I do real estate, I do investing in stocks and I do professional development, and I am a business professional, and finally, I've been investing in stocks for about six years or so seriously. I've tinkered with it often one before, But for six years I've been investing. And like I said before, I've realized, um, Wolf increases by way of investing and have devised an investment approach that has increased my likelihood of success in the market. My investment methods have been adopted by others that I do know, and they've had similar success. So it is my objective to share what I have learned to as many people as possible. So with that said, Welcome to the world of investing in the stock market. First, I'd like to thank you for having confidence in my knowledge, skills and abilities. As an unlicensed recreational investor. You probably got here because you're looking for different ways to increase your financial wealth. And you feel is, though the stock market can be an option of fulfilling that financial objective, well, I'm here to tell you that you're correct. The stock market has a track record of helping people to increase their personal net worth . But be careful because the stock market also has a history of volatility. Stock values go up and stock values go down. People make money in the stock market and people lose money in the stock market. Some people are good at making money through short term investing such as day trading, which we are going to talk about in this lecture while others have to wait years before they make their money back. And some people, that is their particular strategy, buy and hold, which we're going to touch on in this course as well. So everything depends on timing, research and discipline on the part of the investor. So what you're gonna learn here today is gonna be an overall view of stocks. You're gonna learn about the advantages and disadvantages of stock market investing. You're gonna learn about the differences between various securities and then I'm going to share with you my method to getting started in the stock market. 2. Stocks 02 Stock Market Investing Overview: Now we've gotten formalities out of the way. Let's jump right into it and talk about what stocks are. Stocks are a type of investment vehicle that represents an ownership share in a company. Stocks could be either passive investment stream or it could be a highly active investments dream. And you can think of passive investment stream versus active investment streams. Similar toe. You can look at, ah, person's physical activities. Some people are very sedentary. They just sit down all day not saying this is anything wrong with that? But they have that lifestyle. What people really are not very mobile. They're not moving around. And then you have other individuals who are highly mobile. They're always outside. They're walking, they're running there in the gym, they're doing stuff. So that's the kind of the difference between passive investing and invested it. Active investing. You have those individuals who, when you're looking at a passive investment stream, um, these air typically your buy and hold, um, investors, and we'll talk about those later where they do their research up front. They'll buy the stocks, they know what stock they want, and they say this stock is going to be a long play. It's gonna be good 10 20 years from now because that's how long I plan on holding onto it. So they'll buy the stock or stocks and they'll hold on to it for 10 20 or 30 years, or however long they're gonna hold on to it. It's a long term play. They don't really need to do anything. They check in maybe once in a while, or they may check the markets. And, you know, we're look at their phones and tracked their stocks, but they're not really actively buying and selling. They may they buy or sell every so often. Then you have those that are highly active and those will be your day traders again. We'll talk about those later on which those are gonna be individuals or short term traders . Those individuals who are aggressively researching continuously researching their continuously, doing trades there, either continuously buying stocks or continuously selling stocks, continuously checking the market, continuously, doing research so that they can continue toe either by and ourselves. So those would be the difference. Now, in order to fully understand stocks and in vesting, I want you to understand how we get to be able to purchase stocks. How does a company come into my purview as an investor? And I'm gonna use this example for this training material. This is gonna be my primer. It's Genia in Ginny s started up a limits that they an awards. He's selling lemonade and it's called Lemon Bar. So as the sole proprietor of this, um, eliminates stand called Lemon Bar, she can do whatever it is that she wants to do. Sheikhoun just sheikhoun sell her eliminate for what she wants to sell it for. She can sell whatever kind of lemonade she want. She can hire whomever she wants. She can hire, um, which ever company that she wants to do her accounting. Maybe at the end of the year, she needs her taxes done because their business is doing relatively well. She can hire whomever she wants and within without discrimination and following certain practices because she has a privately held company. So but Genia has other ambitions. Ginny is like, I don't want to just own eliminate stand. I want to own eliminate store. So she makes enough money and she's created enough bus. She's great at marketing. She's great at selling people stuff. She's grated just doing business, period. So she basically levels up and she said, I've moved from eliminate. Stand to now I haven't eliminated Storefront. I've moved lemon bar into a storefront, have nice branding, and I have a nice set up within my storefront, and she's even also introduced various new flavors. So she's been mixing up things, and she's come up with these various flavors she's come up with. Eliminates smoothies, lemonade, ice cream, lemon meringue pie and lemon panel cake for dessert to compliment her libations that she's selling at Lemon Bar and the people have really taken to it. So now her store, she had one store originally in D. C. Because that's where she's from. That's where I'm from. So she's gonna open several other stores in D. C. Now she's opening up several stores and Delaware. She's moved to Seattle. She's moved to Kentucky. She's in Virginia. She's in Boston. She's in Louisiana. So Genia and Lemon Bar A. Now nationwide. She's making a lot of money. She has hundreds of stores, and she even makes another strategic move. She says, Hey, I'm going to open up a store in the Dominican Republic because that's what I want to branch out to next. So now with this store in the Dominican Republic, you can consider Genia and Lemon Bar to be hey International brand or an international brand. Should I say she's gone that internationally? But she has more aspirations than that. She was like, You know what? I really want to take this thing even bigger than that. I want to be in Africa. I'm gonna be in Asia, I wanna be in the Middle East. I'm gonna be all over the globe. And so she wants to take on other competitors. She said, I want to be the Starbucks of lemonade. So what does she do? She says, I need more capital, a k a money so that I can grow my business. So she's figures The best thing that she can do is not take out continuously, take out more loans because as a private business, that's the only way she's gonna really be able to grow. This business is either through MAWR loans or she's gonna have to manage the revenue that she's bringing in, and she's gonna have to tap into those revenues to grow but she wants to grow at a faster pace than with her revenues coming in, and she doesn't want to take out these other additional loans. So she's now saying, What I want to do is I'm gonna take my business public. I want to allow the public to invest in lemon bar so that I can generate revenues to do research and development to do other things, and we're going to talk about that. So that's why most companies go public. The advantages of being a publicly traded company over keeping the company private is mainly the fact that you can potentially raise more capital, a k money. There's money again on a continuous basis, as publicly traded company for as a publicly traded company. Should I say so? The reason why I inject the were potentially into the statement is because investors have to feel confident in investing in your business. There's no guarantee that they're gonna inject those funds if you're in the stock market. So that's why I used the word potentially. There's no guarantee that a business when listed will get people to buy shares in that company. But with publicly traded companies, people can buy and sell their investment interest in your enterprise every day for as long as your business is publicly traded, thus increasing the value of your business and injecting a continuous amount of money. Four. Genia As the CEO and possibly the major shareholder, Woods will get into in a moment to spin on things like research and development for new eliminate flavors. Maybe she wants to add the additional stuff to the menu. I'm investing in technology to better run the business and make it easier for customers to an act of lemon bar or to purely grow the business by opening up other locations, which is her initial thought process. She is a probably own company again. The only way she would be able to do that is through the great money management skills and managing and tapping into her revenue that she's generating or, hopefully her profits, or doing this through loans. But she wants to grow the business in a different way. So let's get back to, um, Genia in this limit bar. And so in, By the way, let me just say this limit bars a totally fictitious organization, and I'm just using this purely for demonstration purposes for this lecture. So if there's any similarity to any company that either exist now or currently or formerly in the past, that's purely coincidental. I just want to put that out there so the appeals process is actually a grueling process toe undertake, and I'm not gonna get into the granular details of the IPO process. But just keep in mind that the main points is gonna be that a business for business to go public, they're gonna have to find an underwriter to back them. They're gonna have to get clearance from the Securities and Exchange Commission if you're here in the United States or you know, some other equivalent body, if you're based outside of the United States, and then you're gonna have to get a securities brokers EC stains such as the NASDAQ or the New York Stock Exchange, which were mentioned later on as well. That will allow you to list on their exchange platform. The company has to determine how many shares they're willing toe offer the public and what the value of those shares will be. Typically, the value of the shares are determined by the value of the business which can be pretty straightforward based on revenue. Or it could take into account the subjective value of intellectual property, patents and other assets that the business may hold. So and also for this example, Genia would have to determine how many shares she's willing t she's going to keep and how Maney that she's gonna be made publicly available and publicly outstanding. Two individuals and usually the founder of the business likes to keep a majority of the shares that way. They don't get booted out of their own organization will show examples of how majority shares work toe one's benefit in a minute. But for now and for this example, it has been decided that the company is valued at $1 million. Genia has decided to issue one million shares in the company. Thus, a $1 million valuation divided by one million shares will equate to what? Yeah, you guessed it an I P o or Target Price. AIPO initial public offering price of $1 for each share that is bought on the market. Technically, with the share price of $1 per share, Ginny S company limit bar would be considered a penny stock and we'll talk about that later . But let's just say Genia changes of mind and decides that she wants to issue 100,000 shares as opposed to one million shares. Again, we divide the $1 million valuation by the 100,000 shares. This would change the target price from $1 to $10. Nail with a $10 per share target. AIPO Limit bar would no longer be considered a penny stocks. That's scenarios shows you how target I peel prices in stock prices for that matter work. But for the sake of our scenario, let's just say that genetic changes a mine again and reverts back to issuing one million shares of lemon bar stock, thus bringing the target AIPO to $1 per share in the United States bomb currently located there to market exchanges, the New York Stock Exchange or in my SC and the NASDAQ. These organizations oversee the buying and selling of interest or shares of publicly traded securities and will dive into the various types of securities in a moment. Just a za real estate broker brings real estate buyers and sellers together and manages the exchange of real estate between the two parties, the New York Stock Exchange and the NASDAQ brings securities buyers and sellers together and manages the exchange of shares of stock between the two parties. Both of these entities act as public stock exchanges in the United States. However, the N Y S E is one of the oldest exchange platforms in the world. The N Y S E is also the largest securities exchange medium in the world by market capitalization. The New York Stock Exchange Trade stocks by way of paper exchanges. If you ever get a chance to see the movie trading places with Eddie Murphy and Dan Ackroyd , you will see the New York Stock Exchange and paper exchanges being conducted towards the end of the movie. The NASDAQ is a relatively new A stock exchange, and the companies listed on it a heavily technology companies. The NASDAQ, from an international perspective, is a relatively large stock exchange by market capitalization but not as large as the New York Stock Exchange. In contrast, in the New York Stock Exchange, NASDAQ transactions are done electronically and not by paper, like the New York Stock Exchange platform. In addition to these two markets, there several markets throughout the world. There are the Japanese Exchange Group, the London Stock Exchange, Shanghai Stock Exchange, Hong Kong Stock Exchange, the JSC in Johannesburg in the Bombay Stock Exchange in India, just to name a few. And in today's de globalised world, you can invest on almost any of these platforms so long as you follow the rules and regulations that may apply for international sellers. And by the way, this is what is issued to shareholders. It is a certificate, basically a piece of paper representing ownership shares in the company. So if you own 100 shares in a company, you would receive 100 is the certificate now in the 21st century? If you're trading by way of online platforms, you may never, ever, and I mean ever see one of these certificates in your life. I've yet to see one in all of the years that I've been trading, but let's get back to Ginny and Lemon Bar. So since Jenny is issuing one million shares of limb a bar for dollar piece, she has the potential to initially raise ah $1,000,000 for her company. But to ensure that she has the majority vote, thus control in Lemon Bar. She holds back 500,000 in one shares for herself, which would give her a tad bit over 50% control over lemon bar. So the public is only going to see 499,999 actively traded. Shares of Lemon Bar hit the market. As Genia will be sitting on the other shares of the company. This is a scratch. This is a strategic move. So remember one of the downsides of being a publicly traded company is that some of your business moves will need to be put to a vote with your shareholders. For instance, if you want to hire new accounting firm or hired new executives such as a vice president of operations, director of marketing, etcetera etcetera, you have to send each shareholder notice of this action, and it will have to be put to a vote. Shareholders can vote for the business change. They can vote against the business change, or they can abstain, meaning they formerly declined to vote. In other words, they're gonna leave it up to the remaining shareholders who choose to vote to determine the outcome of the business move. But by maintaining the majority shares, Genia ensures that all of her decisions will win out as she is the majority stakeholder, with 501,000 shares to, um, everyone else's 499,999 shares. But let's just go win another hypothetical here. So let's just say that Genia, for whatever reason, she's really cash strapped, which causes her to sell some of her shares. So she leaves herself with 400,000 shares and the other investors has 600,000. She's Genia would be vulnerable at this point, as she only controls 40% of the company. Thus she only controls 40% of the vote. But luckily for Genia, her good friend Ashley owns 150,000 shares of lemon bar stock. So as long as Janiya can convince Ashley to vote the same way, she does well. So long as other six shareholders with the some of at least 100,000 in one shares of limit bar stock just so happened to vote in line with her then Ginny is Raina. CEO would always work out in her favor unless Genia make some bad choices in the company slides into bankruptcy. But that's another story. So I just wanted to give you that bit of context on how businesses go from being private to being public, because I think that it is good to have that type of perspective and no, the motive behind organizations being publicly traded. Now that I have given you that insight into why and how businesses become publicly traded, let's get back to the investor because that is what you're here to learn about, right? So as an investor, people get into purchasing stocks for several reasons. But the main reason is to make money. Purchasing stocks is a great way for individuals that either may not have the business acumen. The time or the resource is to start a business on their own to gettinto owning a piece of an organization or many organizations. Some people maybe risk averse as far starting a business. But they may be good on betting on others who have already started a business right. Acquiring an interest in a business is a good way for many people to generate passive revenue for themselves without having the headache of being actively engaged in running the day to day activities of a business venture. Secondly, the barriers to entry in the stock market are very low, as opposed to a lot of other investments, such as buying real estate or starting your own business. But these investments one typically has to have tens of thousands, if not millions of dollars to buy real property or start and run a business. However, with buying stocks, stock purchases are very flexible. If you have $100 to invest, you can invest $100 be proud and be the proud owner, um, in the interests of a company or many companies. Speaking of which, another benefit of stock investing is that you can invest in an infinite number of businesses. If you want to invest $300 in the tech business $1000 into a retail brand off $500 into a pharmaceutical company, you can do so. You can spread your phones of months. Various businesses and industries also your interest in the business or businesses that you purchase a transferrable to whomever you want to transfer them, to allowing you to create generational wealth, be a stock investing. And finally, with stocks, they're more liquid than other investments. So, for example, if you own 50 shares of a company, but you feel as though you no longer want to invest in that company, or maybe you need money because your cash strapped for whatever reason, then all you have to do is sell your shares, and with the within a few days or maybe a week, your cash will be available to you. You cannot do that with, you know, owning a business or owning physical real estate investments. Those investments can take months or years to liquidate. These are the benefits of investing in the stock market. I really wanted to point out these benefits other stock market because you should understand why you are choosing this investment Avenue over some of the other investment avenues out there. But with all the good, there are some negative aspects to investing in stocks. The first negative in stock investment is that you are more than likely going to lack the control over your investment. As a result, you're at the mercy of the company that you invest in. Let's take Ginny Islam, a bar enterprise if she decides to implement technology that you don't think is a game changer for the business. Or she makes some operating decisions you don't like, such as removing the hot selling bubble gum. Eliminate flavor from the menu. You don't have a singing that more likely than not, you're not. You're just gonna be a very small investors in her business. You're not gonna be able to walk up to Genia and give her your input into how things are run. Second, stocks can be very volatile, as opposed to investments like real estate, for example, outside of the housing crisis of 2000 and nine, which saw home values actually go down and they went down as much as 50% in some areas, the housing market usually sees steady increases each year. The housing market may, for example, steadily rise 5% each year in the housing market. Rarely has a down market like it did in 2000 and nine, however, stocks off very volatile. One day a stock can rise by 90% and the next day it could go down by 150%. Now, Muster ticks up my statistical percentages, maybe and I do stress maybe an exact racing. But it's true. People have been known to make thousands of dollars in a day and lose millions of billions of dollars in a day as well. Stocks fluctuate, and that's the negative or the disadvantages of investing in stocks. 3. Stocks 03 Tips and Tenets: now, did you have some background information on securities and investing? Less talk about how once it gets started investing in the stock market, I know that you're ready to dive head first and anxious to find out how to invest money and how to see big returns on your initial investment. But you must understand it. Everything we talk about beforehand is very critical to becoming a great investor. And if you think that you're listening to this material and you want to fast forward past these initial conversations in search of the secret, get rich quick. Formerly that you think is lurking within these lectures, then you need this material more than others. Investing is not about just buying and selling stocks and getting someone to give you a secret tip on which stock is going to make you millions of dollars. Because more than likely, that's not gonna happen, at least not instantaneously. It takes time to grow your money. It is about behaviours, attitudes, patients, continuous learning and other mental attributes that all work together to help individuals build their wealth. Here's something to think about. Let's take a football player more specifically, a wide receiver he could be the fastest wide receiver of all time. But if he doesn't have the discipline to run the routes, the office of coordinators calling he will most likely never be in the correct position to catch the ball. If he's constantly arguing with teammates, has an attitude problem and always taking a me first approach, no one will want to play with him. He may have a short term success in his career, but he will eventually find himself out of playing football professionally or otherwise. The same is true with investing. If you pay attention to the after mention lectures and just want to skip to talking about actively trading, you may have success in the beginning. But character flaws in your undisputed mindset will eventually cause you to lose everything you earn. So let's work on getting your mind right so that we can invest the right way in order to do so. Let's start off by going over some tenants that I have created that will help you mentally to invest in the stock market, to increase your likelihood of succeeding notice where possible, I will use the word likelihood highly likely, highly unlikely, relatively and so forth. These air statistical terms and, um, I try to use them if for all intents and purposes, because we can't say definitively or guarantee you success in anything yet alone, something as complex and volatile as the start market. So you have to start adopting these terms because you have to think statistically and play the odds or percentages again. This is a part of the mind set shift towards thinking like an investor. Don't think you're going to come in investing and always see gains. You're going to see gains and losses. That is a 100% guarantee. Once you get your mental game down, it's going to take educated guesses your research leads and even gut instincts to know when to invest and went to divest in a stock. In a part of being able to do that is developing a discipline like the investment tenants here. Some of these tenants may be familiar if they are, that is because some of them come from addiction support group tenets. More specifically, some of these are from the Gamblers Anonymous tenant. I tweak some of the tenants to fit investing, but make no doubt about it. Investing in the stock market is a lot like gambling, except you have a lot less luck in the stock market and more educated guesses involved casinos. A pure luck. Where's the stock market is betting based on readily available information? Tow US issue in increasing the likelihood that your money is invested in the right asset. Now that I've said that, let's look at these investment tenants. The first tenet that I have, which is foundational, is that you have to admit powerlessness over the financial markets. You cannot control the market's. The market does as the economy does. And since we live in a more de globalised world and all continents in all countries are relatively dependent upon one another, then you are really at the mercy of the markets. And there's no way that you can control all world economies. You have to admit powerlessness. The only thing that you can do is analyze the information it's given to you or hire someone . Nets has the skills abilities to do so and react accordingly. Strategically planned. That's the only thing you can do. You are powerless over the markets you cannot control when stocks go up you cannot control when stocks go down. Even companies cannot fully control when their particular stock goes up over their particular stock goes down. A prime example would be in 2000 and 20. During the very first quarter of 2020 you had the cove, it 19 a Corona virus pandemic. No company could control that. Some companies just happen to be lucky enough to be doing business in a particular manner that benefited the situation. But a look other companies air just powerless over Sepp such activities. You cannot control the market. The second thing you have to assume that all funds invested is possibly lost. That's the way you have to go into the market. I look at it from this perspective. If you ever lend a friend money, sometimes you just have to say that money is gone. I know that. They said, Can I borrow money? But sometimes it may take a hard time to get a friend Panyu back. Sometimes friends abuse friends more than they abuse strangers or debt collectors. So sometimes, if I loaned someone of $50.5 dollars, $100 I look at that is money. That's not going to come back to me if it comes back to me. Fantastic. If it comes back to me with interest, that's even better. But you have to look at it the same way with investing. If you're going to invest $100 if you're gonna invest $500.1000 dollars $10,000 a $1,000,000 you have to look at that as money that is potentially lost because you again it goes back to Tenet. Number one Europe Powerless over the financial markets. If a stock crashes and just immediately goes to zero, you have lost everything that you've invested. You can make educated, bets, educated guesses within the market, and you can do your research and educate yourself on the company and on various things that could impact that company's stock. But you're typically powerless over the market, so if you're going to invest, don't invest with more that you cannot spare to lose honor your investment plan and make sound improvements where applicability and we're going to talk about that because right now we're just on adopting and investors mindset. But we're gonna talk about developing a plan which everyone should have make a searching and fearless moral and financial inventory off oneself. Look at yourself. If there things that you are doing wrong mentally, emotionally, financially, that's impacting your investment abilities. You need to take inventory of that. You need to do an audit of yourself, have a reflection on why you had a bad investment or even why you had a great investment. Because you want to repeat the good things that you're doing. You want to eliminate and correct the bad things that you're doing. Investment Tenet number five Admit toe oneself and to another human being the exact nature of our investment wrongs. You have to be accountable if you do something wrong, be able to admit that you did something wrong. Stop putting the blame off on other individuals. Will on other people. Take accountability for one self in for one's actions. Be entirely ready, willing and able to have defects of character removed again. That goes back to the football example that I had given you. Investment is not just about money and stocks. It is about one self, because if you're not disciplined or if you're gonna be emotional about investing, things can go wrong. Very quickly, and they can go wrong very badly. You have, ah, high likelihood that you are going to have missteps if you don't correct those character flaws. Investment Tenet number seven continue to take personal inventory and, when wrong promptly admitted that ties back into our investment tenet that we just previously stated investment Tenant number eight continually seek knowledge and understanding from credible sources. Again, I said Credible sources If you have a certified financial planner, if you have a broker and you have advisers at your brokers firm that you can tap into or if you do your research and you find certain individuals whether they be in the media. If you find those sources to be credible and a line and you can trust with those individuals and they align with your investment strategy successes tap into those resource is and continually learned. Seek out books to learn more about investing mawr about the market. Continually learn that is very important. Once you learn a market, then you take in. The market becomes easier for you. Your investment strategy has become more efficient and finally make an effort to practice these principles in all affairs. Now that we've talked about the investment tenet. I just want to give a few investment hips when you talk about getting started and investing , the first investment tip I'd like to give is that. First, if I your investments, you want to be diverse or as much as possible, um, dependent upon how much stocks that you're holding, what's in your portfolio, what you can afford to do and what we mean by diversification is we mean, if you want to have asthma, any different types of securities as possible. Um, if you have some tech stocks in your portfolio, you don't want to have, ah, 100% of your portfolio into tech. You want to have a certain percentage in tech. You wanna have a certain percentage in. Let's just say I'm just colonize out its hypotheticals. You wanna have, um, health care stocks, energy stocks, retail stocks, semiconductor stocks? I do Natural resource is which I have in my portfolio. I could I consider natural resource is to be like water, their water stocks. You can invest in gold, copper, silver, you know, your precious metals and so forth. Um, I do artificial intelligence. Um, and I look for various services. Maybe like defense defense, contractor type of stocks. You wanna have a mixture of those stocks within your portfolio, and even still, I'd go a step further. You may want also invest in some E T. F. So you want to invest in some REITs, which are real estate investment trust. So you want to just have and you also want, maybe possibly get into some index funds. It's always good to have a mixture off different securities within your portfolio. On the reason being is that there may be times when this when your text sector is not doing so well. But maybe the health care sector is doing well, Um, and or vice versa, or another type of sector is doing well. So when you want to, um, when one type of security is down within your portfolio and it's maybe either lagging or make, um, or not doing or just kind of stagnant, then another, Um, stock within your portfolio is probably gonna be doing very well or could potentially be doing well. So that's why you want to always be diversified so that not everything in your portfolio is crashing all at once. The second tip that I like to give is take tax implications into consideration. What I mean by tax implications is always understand that when you're investing, when you're making profits in the stock market and either making losses in the stock market , those we're gonna have a tax implication for the year that you conduct that transaction. Typically, will you conduct the sell transaction not necessarily the by transaction? It's really on the cell. So if you if you sell something during a particular year and if you have made some games off of that, if you made a profit of $100 or 1000 or 10,000 or a $1,000,000 you have to take that into consideration that there is no typically there's no taxes withheld or there's a possibility that there's no taxes withheld on those gains. You're responsible for paying those. Similarly, you may decide to sell particularly securities and take a loss for whatever reason, and those are gonna have tax implications when you as well it's gonna lower your tax obligations, and the other one's gonna raise your tax obligations if you have gains, so you have to take those into consideration you have to know. I'm what percentage You're probably gonna have to pay on those, um, gains. And if you held it short term versus long term with the tax implications. And these are things you want to seek out either financial advice on from a certified financial planner or from a certified public accountant or you want to do your own research on everyone situation is gonna be different. So I cannot tell you, um, you know what your tax obligations are gonna be and also amount of financial advisor, So I would not want to step into that room to do so. The third tip, I would like to say is transactions to be big storm logic, not emotion. Again, we're going back, and that's gonna be a very common theme. As far as getting your mindset ready to invest, they're gonna be times. And trust me, I've made this makes mistake a lot when I first started investing, and sometimes you can still make the mistake. As a veteran investor, you based your investments on exuberance. Either you're overly excited Or do you feel that is, though you're missing out. It's a feeling as though you're missing out on something they call it foam. Oh, I just called it just plainly The fear missing out that or you're not excited about something. Your portfolio. Maybe you heard some news and you get scared. You have a beer. Some emotion is driving you to do a particular action, and you wind up dumping something in your portfolio. And ultimately, when you dump because you dumped something out of your portfolio and you took a loss on it , or maybe you got out too soon and then it continually rises. Or maybe you got overly exuberant about something in the market crashes, these things happen, and they happen to even people who are doing logically based stuff. So when you add emotion into it, it could severely impact your portfolio. As an example, I had, um, a couple of 100 shares in a particular stock and, you know, I read a news headline and just off of a news headline, this is when I first started investing and I read a news headline, and I immediately I got scared of the The fear came in me and I immediately dumped all of the stock all a couple 100 and then the next thing you know to stop continued to rise and rise and rise. And I missed out on potentially tens of thousands of dollars because of that transaction in that fear, and it was a lesson learned for me and it. But again, I learned from it, and I did not continue to make those same mistakes. So when the market starts having radical shifts, I no longer make emotional investing decisions. I make logic based ones. Another tip that I like to say It's cash your cash, and what I mean by that is you wanna always have a cash reserve. This is something to that I've learned sitting either in your investment account in your brokerage account or somewhere readily available so you can transfer will get that money into your investment brokers account. Always have a reserve, a cash. You should always have a reserve of cash appeared. I'm talking about a reserve a cash not just for your primary everyday use into, um, fund your living expenses four 3 to 6 months. But you wanna have a reserve of cash ready to go into the market that's earmarked to say I potentially I'm gonna use this money as an investment to fund an investment strategy. And the reason why I say that is this. There have been times, and this is one mistake again that I've made before you have. Let's just say you have $10,000 in your investment account. You take all $10,000 invested in various tech stocks. Various, um, natural resource is and our energy stocks. And so you use up all 10,000. Or let's just say you use up $9900 so you basically only have $100 sitting and reserve. Or maybe you used up all 10,000. You bought all of these shares in particular companies. Something in your portfolio may or may not work or right after you have all that money invested, there may be an I p o. That's did you probably been waiting on a company that you feel very, very good about. And you're like, OK, this I pose, come in and talked about. I pose. That's a company that has decided to go public, and this is their initial public offering that everyone can get in potentially on the ground floor, and I said, potentially cause the stock, it could price the AIPO could, um, make its debut. It let's just take $10 a share or $1 here like lemon bar, and then it could go down to one sent. It could become a true penny stock in the in the sense of the work, or it could potentially rise up. But if you see that I po, that made, you may say, Hey, I want to jump in I want to really get in on this stock and you don't have the funds because you have all of that money tied up into other investments. Now, if you're if you're a day trader, this may not be a bad thing because you're a day trader or a short term trader, and we'll talk about those terms later on because those individuals are always making transactions. But if you're a buy and hold type person, you wanna have some cash definitely sitting in reserve for those type of moments, or even if it's not an I P O. You may have against something in your portfolio that's not working, but then you see another opportunity for another stock that you've been tracking that is working in the numbers that you put together your algorithms or look urologic. Whatever formula that you're using is telling you that this other stock is going to be a way better performer than something in your portfolio. So you want to be able to immediately have access to cash. That's why I say cash or cash. The other tip is sometimes a single share is better than 1000. And again, this is another lesson learned that I had to learn when I first started investing. Let's just say, for argument's sake, I only had like, $1000. I don't know what the exact number was, but let's just say I only had $1000 and I'm gonna use were awarded examples here. I looked at Chippo plan to Pouliot. That time was sitting that I think about $200 a share and I said, Man, I can only afford about five shares of Chipotle, and when you start investing sometimes is it is a novice investor. You start seeing five shares is not a lot. You start quantifying the number of shares as opposed to qualifying the company and the potential and So I looked to Chipotle shares and said, I can only buy five shares. That's a polar. But then there was another stock that was sitting it, like 15 or $10 a share. And I said, I can buy 100 shares of this because ah, 100 shares just looks way better than five, right? And so what I did was I I think I wound up buying. I think I wound up buying two shares of Chipotle. He was like, Yeah, I think two shares of Chipotle And then I put all of the other money into the other Stop. The thing that I'm trying to say here is that over the, um, over the short term, um, or long term or whatever. I think I made about 200 something dollars and off of those two shears and chipotle, and then I made only about $50 off of the other stock that I was invested in. Now again, here's where I talk about two when I'm going back to, um the transaction of, um making logic bases opposed to emotion based transactions. I was doing short term trading at that time to try and get my dollars up. So I want a dumping the two shares of Chipotle and investing another stuff, and this is actually worked out for me. But if you look at Chipotle now, Chipotle is up to $1000 a share least. And, um, 2000 and 20. And what I'm trying to say to you is those If I had bought five shares it $200 per share and they would have gone up all the way up to $1000. This year I'm sitting on $5000. I'm sitting on a $4000 profit, which is not bad, as opposed to investing in smaller stocks. Sometimes stocks are priced low. Foi reason. You'll see stocks that are priced high, but they move their move like $50.60 dollars in a day. You can earn 50 to $60 per share in a day. The stock may be priced at $900.1000 dollars, but it'll move and it also drops, you know, considerably, too. So keep that And to take that into consideration, those stocks that are there high, um, dollar stocks that I like to call did have you know those high stock prices. They will drop $5.10 dollars, even $30 in a day, even $60 on the day. But they also rise 5 10 30 $60 today, as opposed to you'll see smaller stocks that maybe like $10 per share. They may rise in the amount like a dollar a share a 60 cent a share, 30 cents per share. So just keep that in mind. So sometimes a single shares better than 1000 shares. Um, also keep in mind to the experts are even wrong. Ah, lot of times you hear individuals, they're on TV. They may have. They have a lot of information that they're tapped into. I'm not trying to say that they're not experts, but what I'm trying to say is no one knows everything. So you cannot always take everyone's advice is if it is golden because everyone's wrong. The stock market is about educated guesses. It's about having but the stock market. The one thing that the stock market does it other things, such as gambling and so forth doesn't do is the stock market provides you with rial educated information. There's a lot of information out there. So when you're making guesses about stocks, you pretty much have a lot of information, and resource is at your disposal to help you increase the likelihood of gains. But just keep in mind that not everything that you hear from industry experts and or professionals is going to pan out. And so finally, the one thing that I do want to say it's an investment tip is to, um, that it's OK to take losses. Sometimes it's OK to take losses. They're gonna be times when things aren't working out in your portfolio and you may have to take $100 lost in order to make 500 or $1000 someplace else. Um, you just have to continually look at your portfolio, especially if you're doing this on your own. Um, if you're If you're doing a self directed brokerage account, which means you're managing your own money and you don't have an adviser doing things for you, you're gonna always want to be looking looking at information. And it's gonna be times when you're gonna have to say, I have to cut my losses in this one particular stock, and it may just be because you don't have long term hope for this stock. Or maybe that there's another opportunity in another play. And that's why it kind of goes back to good, that cash in your cash If you want to hold on to it long term, so be it. Just make sure that you have other cash to tap into other opportunities, but there may be times when you do want to take a loss, and that may just be also to for the task tax implications as well. 4. Stocks 04 Investing Terminology 101 Part 1: okay, now that we've shifted our mindset, the next step is to educate ourselves on investing. Education is an important facet of life. You can learn academically in order to get a high paying job. Sometimes you can learn for self improvement. Learning is just a part of life. Those that stopped learning will stagnate, and those that continually learn oftentimes surpassed those that don't you're learning doesn't have to come in a formal classroom, either. In today's society, there are plenty of ways to learn and grow. The Internet has a bunch of credible sources for one to digest. You may have people with in your life that you can reach out to that are credible sources of knowledge that can counsel you in various ways. The point is to continue to learn when you invest, learn as much as you can and learning at your own pace. You don't have to learn everything all at once. Start investing slowly and invest in what you know until you learn mawr. Then, once you learn mawr, you can invest in more things. The best teacher you're going to have is going to be your own experiences so as you invest in succeed. Learn from those successes and as you invest in, have setbacks. And trust me, you will make those teachable moments when you analyze what you did wrong and how can you handle the situation Better moving forward, continued your education. No matter if it's just learning one little thing a day, week or month, but learn and grow, it will help you become a smarter, more efficient investor. Now we've talked briefly about market platforms. Specifically, we focused in on the United States market platforms, the the New York Stock Exchange, and we talked about the NASDAQ. This were publicly traded. Companies offer shares of their company, um, to be purchased and were sold via those two mediums and again their various platforms throughout the world. Canada has a trading platform. Europe has a trading platform. Various countries In Europe, you have the JSC in Johannesburg, you have India has their trading platform. Um, Hong Kong has a trading platform and so forth, So dependent upon where you live, there's gonna be a trading platform that you are going to be interacting with and or if you're in a national person and you have banks and you can trade in other countries, you will be explored. You will have exposure to those trading platforms as well. But right now I'm gonna focus in on market indexes market indexes. They give investors a summary level view of the health of the economy and the health of markets. People tend to use them as benchmarks for various market segments or for the market as a whole. Before we look at the major market indexes, I'd like to add my own personal experiences with these market indexes. As you will soon see market indexes, they can be looked at as a quality assurance check on respective markets. In this case, we're talking about the U. S. Market. Of course, because I'm in the United States, however, market indexes may not align with your investment portfolio. Thus, there may be instances when your stock portfolio is doing well in the various market. Indexes are not, and vice versa. This happens to me all the time. I have continually experienced days where my portfolio was up 10% 20%. I've even got its highest 30% in a single day in the various market indexes. They were all down. I've also had instances where respective indices were up and my portfolio was down. That's because you may choose to invest in securities that are not being tracked by one or any of the market indexes. So with that said, let's look at the three biggest market index ease in the United States, the three biggest ones that you're gonna probably constantly here about when you start investing. Or maybe even before maybe you've already heard of them of the Dow Jones industrial average , which you'll see abbreviated as D. J. A. The NASDAQ Composite Index and the Standard and Poor's 500. So let's first start with the Dow Jones industrial average and people also called the Dow Jones Industrial Average. The Dow. You'll hear the Dow. You'll see it abbreviated as D. J D J. A. But you're mostly commonly here to the Dow Jones industrial average refer to as the Dow. Um so the Dow really just consists of Onley, 30 of the largest publicly traded companies in the United States. So, um, the dad was created by by individuals whose last names were down Jones, and what they've done is they said, Let's take the way we're going to gauge. The health of the stock market is to take the 30 biggest companies in the United States, and we're going to track those companies. And based upon those companies, we can predict the health of the market of what the market is doing for particular day or over a particular span of time. So, um, with the Dow, those stocks can be from either the New York Stock Exchange or from the NASDAQ. So they're tracking American stocks, particularly, or stocks that are listed. I should say, American stocks, stocks that are listed on American exchanges. That's very important because you do have international companies such as, like Ali Baba trade it, which is a Chinese company. They're traded on the NASDAQ and or on the Dow. But they may not particularly be in the traded on the New York Stock Exchange and NASDAQ, but they're not particularly track within the doubt. But they tracked stocks. The 30 biggest ones that are on the New York Stock Exchange or NASDAQ in the list for those for the Dow is dynamic, so some companies get pulled off of the Dow. Some companies get added to the Dow so, more recently, I think Amazon and or Alphabet and Apple. Um, we're probably added to the Dow, basically, because tech stocks of the newer stocks and mawr some some of your more legacy companies that have been retail companies particularly like maybe Ford and or some of the older automotive companies that are now struggling have probably been pulled off. So the list is dynamic. It's not like it's stagnant. When they created it, they said they were gonna track these 30 from 19 seventies. On forward. The stocks get pulled off, and it is very dynamic, or you could say fluid, and it is a weighted average, so they give preference to the more expensive stocks. So if a stock is prices at, let's just say, 200 something dollars a share or taken Amazon, which is it like $1000 a share? That stock's gonna have a heavier weight on it, as opposed to 1 may be listed on the Dow. That is only it. Let's just say $90 per share so they do that type of weighted average in the gift preference to the more expensive stocks. So that is the Dow again. The Dow only tracks 30 stocks. So again, those 30 may not be in your portfolio. May be one of the 30 is in your portfolio. And that's why I was saying before is that they're gonna be a lot of times where you're gonna looking. You're going to see, um, you may look at your television or you may be tracking on your phone or whatever medium that you're tracking the stock market and you're gonna look at the Dow and you're gonna say , Wow, the Dallas down. Um, let's just say 200 or 400 of 900 points for the day, But then you may get wary, and then you check your portfolio and your portfolio is probably gonna be up. Or maybe they're predicting that the data was going to drop tomorrow and didn't You may decide to panic, and then you decide to initiate a cell for the foot of the next morning before the stock market opens in. Your portfolio is doing fine. You cannot really, um, use some of these indexes because they're, um, Indices may not aligned with what you are trading. So that's why it is very important for you to know what these indices are tracking and what's in your portfolio. So now let's talk about the NASDAQ, the NASDAQ composite index the next that is also referred to as the NASDAQ for short. That's how you're just going to see it. You're going to see the NASDAQ, and that's basically what it really is. Um, it's both the index and the exchange. So what I mean by that is NASDAQ had a next change platform, right? It's the New York that's similar to the New York Stock Exchange, where you can't exchange. Um, you can buy and sell securities, the NASDAQ platform from companies that are listed on the NASDAQ. Well, the NASDAQ, What they do is they just use all of the company's that's traded on the NASDAQ platform, which is around 3000 So far as of this recording, and they just basically say, By the end of the day, we were going to give us some. A summary view of what the NASDAQ has done is that the NASDAQ as a whole is down, you know, outnumbers of being pulled from all 3000 companies from the NASDAQ in the NASDAQ is either Daniel, it's out there up and that's what they're basically doing. It's consists of, you know, us and international public companies that are on their platform. So whatever companies are being traded on the NASDAQ platform, that's what they're tracking. So and also the embassy. The index is based mostly on technology stocks, so it's heavy technology sector and it's weighted index based on all NASDAQ exchange stocks . So, again, if your portfolio doesn't have any stocks that you know are from the NASDAQ that are being traded on an Aztec, it may be your stocks are coming from, You know, maybe it's a foreign, um, platform that your trading over there, your stocks are coming from the New York Stock Exchange. This index made not beep relevant to you or, you know, you may have some of your stock, so you may just want to just see as a whole, despite also very important, from my perspective to you, for you to track your platform. But this may kind of give you an overall view of what the market is doing, and then there's the Standard and Poor's 500 or you'll hear that refer to as the S and P 500. It consists of the top 500 publicly traded U. S companies. Um, it's a list of stocks that are tracked, and that list is dynamic, and it is a weighted average based on proportion to eat stocks, total market capitalization. So, in addition to the major stock market indices listed, there are thousands thousands of other indexes that track the performance of the stock market. I would recommend that you pick one or pick up a few and track those indices. Just keep in mind that the market indexes should be used to give you just a cursory view of what the market is doing during the given time frame and for specificity about your portfolio. You would need to be in your brokerage account and actually looking at your portfolio of investments to see how you're doing, because the market indices just tell you how well the market is doing. But your brokers accounts to tell you how well you are doing. So we've looked at the trading platforms, the New York Stock Exchange, and then we've also talked about the NASDAQ. Then we've also talked down about market indexes and how to redos. If you're out and about in the street or you're doing something else and you're not in your brokerage account. And maybe you're just like, Hey, I want to know what the market's doing. And you know, the market is overall as a whole, and then you just glance and then you looking and you just look it either the s and P 500. You look at the Dow, you look at the NASDAQ, and then you're like, OK, the markets up will the markets down. But again, remember, that only tells you how over the overall market is doing. It doesn't really tell you specifically how well you are doing. You would have to be in your brokerage account. Do that. Now we're gonna talk about market influences, OK, So as you can see, we're working our way down to start talking about stocks. We started it the exchange where we talked about the market and axes. Now we're gonna talk about some influencers to stock prices. So as you know, stock prices go up and stock prices go down. Sometimes we want stock prices to go down, right? Do you know when we want those prices to go down? We want him to go down when we want to buy something that we don't own yet. Or maybe we already own some of this stock. But we want to buy Mawr of it, and we went on a cost basis to go a little bit further, Dan, and we'll talk about cost basis in a minute. So think of a new television. We may like the latest TV that was release. Maybe it's a smart TV and it's, ah, super thin, and it's got off Bunches. Got thousands of features, but we just can't really afford this television set. So what do we do as human beings? We wait until the prices go down. We wait until, like the holiday season or some end of the year season come, sale comes around and then we buy 123 or even five televisions. But then when will we want the prices of those TV's to go up? Probably guess it. We want him to go up after we've bought the TVs, and we want to sell them and make a profit off of those TV's. So, however, sometimes we may have the weight days, months, even years, you know, before that may happen so that we can sell them and, um, and make a profit off of those televisions. So that's the nature of investing. Prices fluctuate, and we wait to find opportunities to either buy or to sell. So what? Imp? So let's talk about what impacts those prices and would impact stocks. So let's take a look at a few of the factors. The first factor I'm gonna list here is gonna be company performance. And that's right. So basically, it's basically how well the company is doing. Is the company meeting revenues? You know, because once the company starts investing on once they become a publicly traded company, there now have their books open for investors and analysts to look at and to determine whether this company is gonna, you know, make a particular estimate. You know, earnings per share for particular quarter or whether they're not going to make those estimates. You know, when companies have to provide those numbers to say, you know, this is how well we're gonna do this quarter, and this is how what we're gonna do or were expected to do for the year. So company performance is gonna be a huge factor in determining, you know, whether the price of a stock goes up whether the price of the stock goes down. So, for example, sometimes the company will get into, let's just say their second quarter and there realized OK, this quarter is not gonna be as big as what we thought we were gonna be. We told you guys that we were gonna, you know, do X amount of, you know, numbers and revenue, or and or which equates to a certain numbers in earnings per share or GPS. But we're not gonna make that. Or maybe it comes around and, you know, it comes time for the end of the quarter and they released their numbers and they did not meet the analyst's expectations. Then, pretty soon I can guarantee you what's gonna happen is that stocks going to go down because they missed their earnings. If the stock beats earnings depending upon how well they beat the earnings, that stock could go up. There's a potential for that stock to go up again. There. Other factors because you made you may meet or exceed with the analysts expected, but then you may have a dismal outlook for quarters. Three and four or four for the remaining quarters. So their various factors, once a company is reporting that can influence their stock price. So it's company performance. Um, we can also look at the executive management team. Most people or some people at least feel comfortable with who's in charge. If you have a particular CEO that's in charge, you know that CEO may, um, you know, have a particular personality that people like. And it that CEO leaves didn't the confidence or, you know, the trust or the uncertainty of who's going to replace him could tend to impact that organization. Um, and vice versa. So a company's executive management team is very important and can't influence stock prices . So also, you have supply and demand of a stock. If there's a particular a bunch of people are trying to sell and you know there's not that many set the buyers out there, then the price of the stock is going to go down. If a bunch of people are trying to buy and there's not that many people trying to sell, then to spot the price of the stock is probably going to go up because people are there more people trying to get into the Stockton, trying to get out. It's similar to the housing market. If it's a buyers market, then prices attend to, you know, not increase in a real estate market. You know, prices tented, and they don't really mostly bowl for the most part. But the prices don't rise particularly well. And sometimes buyers can't get those houses. You know, at a discount of homes on the market. Foolish to say $100,000 it's more of a buyer's market, you know, most times and not the house of probably sell for maybe 90,000. But if it's a seller's market, more people of putting in bids, you know, offers for that house. It could become a bidding war. That 100,000 could go up to 110 and 120 it's a similar effect on stocks. It's the same thing if you put a stock out there and you want to sell that stock for $10 a share, and it's not that many people biting on it, but somebody wants, but a bunch of people want to buy it. Nine. You may have to compromise and sell it at $9 a share, thus lowering the price down for other sellers. Similarly, if there's a bunch of people bidding to get into a stock, then that price that $10 could go up to $11 or $12 so forth. Next we can talk about investors, which is similar to what we kind of talked about. If the Bulls are greater than the Bayers, which means they're more people, the bulls would be the optimist people and the bears would be the pessimist ones. If they're more bulls in the market than Bayer's, then there's gonna be an increase in price. So you have more people trying to buy the stock. You know what? You have more people that are optimistic about the stock market. Then you know the people that are pessimistic than prices attempt for typically going up. But if you have more people that are pessimistic, then more people that are optimistic you can look at it is you can probably say prices are going to go down, and then when we also talk about investors as well, we can talk about speculative investors or spec investors and those are people who just speculating on a particular stock, and that's those people tend to speculate on, like, penny stocks and or unknown markets. And we're gonna talk about spec investing in a little bit. But speculative investors they can influence stock prices as well. Um, you can look at the economic outlook of a country or of the global economy. Those have a particular effect on the stock market. You can look at the political climate, whether we're talking about trade wars or whether we're talking about physical conflict. Those play an effect on the market, and you can also look a socially fits. So when we're talking about social events, we're talking about plagues. Civil arrests were talking about terrorists attacks, and you're also those would be from the negative perspective. But you could also be talking about potential cures, potential cures for cancer, but gentle cures for some pandemic that's running rampant so those can have a positive effect on the market. That's making the market go up. Or it would be more than less likely that stocks would rise from those types of effects and from play, civil unrest and terrorist attacks, stocks would go down then you can look to about press releases. What kind of news is this company getting? If a company is getting a particular amount of news and people are hearing about it such as , you know, a company has just created some, you know, new asset for the company to sell. Or, you know, they've created some new technology that may generate a buzz within a particular company for people to buy it. Or maybe if they're getting negative press, it could generate or increase the probability that a particular stock could go down. But those haven't effect one stock prices as well. And then, finally, one of the other things that influence, um, the markets are, um, influencers, opinions and what we mean by influencers, where you can look at those people who are in the media, whether it be social media platforms, whether it be on television or so forth. But if a person who has a lot of cloud who has a lot of weight behind their name and they have a big following, if they mentioned a stock or give a recommendation to purchase a stock and or to sell a stock, or maybe they talk about a particular sector is gonna be big or particular sectors gonna fail. They can impact other buyers on other particular traders to either purchase a stock or purchase a stock within a particular sector that's impacting that stock. That particular company stock or particular sector. Or they can influence people to divest, which means get out of a particular stock or particular sector. So those would be the market influencers that I wanted to talk about. Now let's look at the various security investment types for purposes of this lecture were mainly gonna focus on stocks, and using stocks is an example. But there are plenty other security investment types that you can get involved in. Aside from stocks, which we've already talked about, which is an investment vehicle that represents ownership share in a particular organization . We can reference back to the example that we used in this class Genia and Ginny s company, Lemon Bar. Um, in addition to that, you have bonds and with bonds are there also financial instruments. They are debt related, and they cannot be government issued or privately held, and typically bonds are traded over the counter. You can also go through various brokers. Some brokers do offer bonds for you to invest in, um, but you can't invest in bonds as well. And those air get related investments. The next investment type that you could look to invest in would be mutual funds. And the way that you could look at mutual funds is thistle. I'll give this quick example. Mutual funds are basically, ah, portfolio manager creates a mutual fund. He creates this class war, this grouping of let's just say, x number of companies to invest in. Let's just say that number is 50 he he says. There's gonna be 50 companies in this portfolio that we're all going to invest in. And so now he's hoping it opening it up for a pool of investors. So these air investors, you may be one of hundreds or one of thousands of individuals who are willing to pool their money together to invest in these 50 companies that are grouped together. And so that's the way mutual funds were. Mutual funds are, um um, typically fee based, so you will see fees associated with them, and typically those fees can be high Now, in addition, toe mutual funds you have something called index funds and index funds are similar to mutual funds and so index funds they operate in a similar manner. However, the word index kind of ties into what we talked about earlier when we were talking about the various indices. Remember the Dow Jones industrial average? Remember the NASDAQ composite remember the S and P 500? So that's where it kind of gets. I guess it gets its name from I'm kind of providing a supposition here, but what index funds does his index fund says, Hey, well, you know, mutual funds are a little expensive. You know, you have this. Their professionally managed in this individual is actively someone. It may not be you, but some person is actively managing this portfolio off cos for investors, for pools of investors to invest. And this we're talking mutual funds name. And so since he's actively investing it with his time, he needs to get paid in his fees a relatively high. So now let's come up with something called index funds and we're basically going to do is kind of create maybe some type of algorithm, some type of function. It says we are going to create basically funds, which you know a portfolio of stocks to invest in that mimic a particular sector. Now, whether it's gonna mimic the Dow Jones industrial average, whether it's gonna mimic the S and P 500 whether it's gonna mimic some of the other, um, index funds that air indexes that are out there, then that's what that fund would do. It was kind of set up on algorithm that kind of basically, um, aligns with that particular index, so that if that if the SNP is performing well, then you can probably is a high probability that that portfolio is doing pretty well. That Index fund is doing that with this not doing well. So high probability. The debt index fund is not doing well that you chose to invest in because that they're using the algorithm to align with that particular index and you can invest in those and those are passively managed because of what they do is they create an algorithm and it's not really managed by a professional. So the fees are typically lower to invest in index funds and finally you have E T. ETFs or exchange traded funds, and they operate similar to index funds as well as mutual funds. The only difference is that kind of treated as a stock the way they're traded so you can buy and sell E. T s, um, as if they were common stocks. It's if they were, You know, a lemon bar type stock is if they were an individual stock, as opposed to a pool of stocks like you look a mutual a portfolio if, as you look at mutual funds as well as index funds, so those three funds are very similar, they do have slight differences between the two and again with E. T. F says, Well, they do have fees associated with them. They're just not as high as mutual funds. Mutual funds typically are at the highest, Um, as far as you talking fee based trading. And then formally, you have real estate investment trust And what real estate investment trusts are there? Financial instrument that pulls individual investor funds into real estate based companies . And one of the things dead, um, is interesting with real estate investment. Trust is that with real estate investment trust by law, they must pay out in dividends roughly around 90% of their net income to their investors. So you can think of these as dividend payments. So if you're looking for like a dividend, stocks, um, reach may also be ah comfort zone for you, because by law they have to pay out dividends. So you know where's posed some other stocks. Their dividend payments may be lower. You can look at the ref's payments and those will be relatively high. Additionally, since the real estate focused companies, um, that may be something that some individuals are attracted to because they're attracted to the real estate space. Um, another thing, too, that you can look in in regards to reads, is that you may just be thinking, Oh, what Reaches involved in real estate. They're talking about houses. Well, real estate is a lot of different things. This talking about land. You have five G reeds, which are basically some people by a land to put cell towers on in the charging. These telecommunication companies, um, basically rental space leases to, you know, attach their equipment to that, um to their property into their polls so that they can provide coverage to their customers . So some someone owns this land or owns this structure, and they're renting to space out to companies in order to do business. They're also, um, data center REITs. So basically, data center REITs just to give a quick example of that. It may be a building just full of servers, and some company owns a bunch of 12 or X number of buildings that are just full of servers in a least, these out to big organizations, so that organizations can provide whether it be managed service, you know, third party cloud services or whatever type of services to their customers, or to maintain their websites or to maintain their online businesses. So that's another type of Reed. Didn't you have your traditional reads where people are buying and selling and leasing apartment buildings or the leasing? Um, you know, senior living communities, you have those type of REITs. So and then also to the the latest thing that's been popping up our, um, marijuana REITs. So you have individuals or companies that are buying up land in leasing them out, too. Companies that are involved in growing cannabis and so you'll see those type of companies come out as well. So the real estate space is very diverse as far as the type of real estate that you can invest in and again associated with. That is the fact that they do have to by law, pay out dividends. So if you're looking for dividends, that is a good space. But you can also get dividends in stocks. You can get him in mutual funds, index funds and e. T. F says Well, so those are the just some of the different types of securities that you can get involved in their their pros and cons with each of these, I mean just touch upon a little bit. If you're looking at individual stocks, individual stocks allow you maybe a beginner investor or maybe just is an investor who knows kind of what they're doing and what they want to pick out certain things that they want to purchase specifically. If you're going to get involved in day trading, individual stocks, maybe the route to go because you can eyeball a particular stock, you contract a particular stock, and then you may know what you want, and you may purchase that stock and you make buy and sell it very short term. You Like I said, if you're doing day trading, you can buy it for a day, sell it for day. If you're gonna hold it for a couple of days, you can do short term trading. So that's kind of the benefit of individual stocks. In addition to just knowing the specifics about that company and tracking that particular company, um, the downside is is that if your own stocks, sometimes you just have to when you want to diversify. So if you if you're heavy into just tech stocks and the tech sector goes down and you're not leveraged into, let's just say another sector, whether it's health care, energy, semiconductor, actors, pharmaceuticals, whatever order automotive. If you're not invested in various cluster of sectors, then you could potentially have longer down terms than other people. Because again the markets volatile. Sometimes some sectors do well. Sometimes some sectors do not. So during those downturn times when the tech sector's not performing well, and if you're heavily leveraged in that, then you're gonna be able to Didn't you risk the potential of having all of your money tied up into one particular sector and you're not leveraged where you're not making money in other sectors with mutual funds index funds in E T f. You can get that there's a potential possibility to get that diversification. However, with those you're, um, you're bound by what the portfolio manager has decided to put in that particular portfolio . You can't pick the stocks that go into that portfolio. It's already predetermined by the fund manager or by the particular algorithm. So you are bound to the particular stocks that they've chose to invest in. The only thing you do is maybe pick a mutual fund index fund or e T. F sector. You know, whether it be the airline sector Weatherby attack, whether it be, um, something, you know, um, you know midcap something you would pick that particular e t f and you would invest in it. Also, when you're looking at mutual funds, um, again, we talked about the high fees associated with mutual funds, and then sometimes you can look it with those funds they are. Some of the funds take. There's a minimum entry, so there is somewhat a barrier to entry, as opposed to like with individual stocks. If you find a stock for $4 you can buy one share, sometimes of e, T. ETFs and index funds. Mutual funds, definitely with mutual fund. Some of those finds it. They They say that in order to get in, you have to have initial investment of a $1,000,000. That's the starting point. Now that's very rare. Those are usually the higher class moons, but but I have seen some that happened as high as a $1,000,000. But then, also, you do have those funds to say the minimum investment to get in as $100.200 dollars $500. You commonly you may see like 2500 around there in order to get in. So that's typical for a $1,000,000 on my iPad have Signet. So those are some of the pros and cons of the various security types. Now let's talk about some of these stock market attributes when you start looking at individual stocks and or even mutual funds. But just or should we just say, the various securities and as they're traded on the exchange platforms, you're going to see particular attributes associated with those particular securities. So I want to just walk through a few of those Jessel that you're familiar with what you're saying and that you can understand exactly what it is that they're trying to communicate or convey when you're looking at a security online or through whatever medium, whether it be through your brokerage account, whether it be through some publication or whatever platform. So the first attributes that you may see is gonna be the close price and the clothes prices just simply the most recent price the stock sold at by the end of the trading day. So that means the day has closed once the day has closed. What was the final number of that stock for that particular day? So you may come into the following morning right before the market opens, and you may see a close price that close places reflecting the previous day in the last price is also going to be. It's gonna be a currency, whatever currency it is that in your respective country. But that last prices, usually the latest price per share. The stock is sold, and that's different than the clothes price. In the sense that the last price could be, the trading day has already resumed for the next day and the stock is continuously trading and it's traded it. Let's just say 9:45 a.m. and it traded at a and then, But that's just representing the last moving price. So that's why that's what differs from the close price. The change. The change is usually in a currency, and it's gonna have to be a plus or minus that you're going to see associate with that. So the change if you see a plus, that means that it's gone up and or the change in the last, the price difference between the Christmas minus the last price and they're higher than the clothes price. Then you're going to see a plus, um, currency amount. If the clothes price is greater than the last price and you're going to see a negative associated with that next that we can talk about today's gain loss, you're going to see that and you'll see that in a currency in the United States, and you're going to see a plus. And that's usually that's putting achieve for particular day when you're gonna and the last price minus the close price reflected in percentage amount. And that's particularly the same thing, and I also listed the formula here. If you wanted to determine how you come to that, today's gain or loss percent had half the dollar. What a total gain loss in dollars. And that's just the total amount of profit or loss did your stock holdings achieved. So that's just reflective of your portfolio. And it's just taken into consideration. You know, various calculations within your portfolio to come up with your particular games. The losses are not the markets, and they know, so you're going to see total gain or loss in percentage. And that's just the percentage value of your stock gain or loss. Did you go up 10%? Are you down 10%? Are you up 80%? Are you down 8%? You can be up 1000% or you could be down. Um, so it's just going to show you what your gains or losses are. Quantity, quantity is gonna be a number value, and that's just one. Even if you bought 50 shades of shares that you hold 5. Stocks 04 Investing Terminology 101 Part 2: the current value. The current values usually in some form of currency number, value of asset usually or the original value of assets, usually for tax purposes. And so how do you get to that? You come to the number of shares times to purchase price. If you multiply that up and then you add that by your brokerage fees, if you have any that would give you what your cost basis is. So normally the cost basis is used so that if you originally, let's just say you bought 100 shares at $10 a share, that would be $1000 plus. Let's just say you had a brokerage fee of $5 associated with that. If you do online trading, you'll see that online trading. They offer very low fees, like per transaction and maybe 7 95 Maybe 95 brokers have gone in a 4 95 and a lot of brokers are at zero. So let's just say you had let's just say the brokers, charging $5 per transaction. So you bought 100 shares at $10 a purse year. That's $1000.100 times 10 is 1000 and M plus the $5 for that one particular transaction. So it would be 1000 and $5 would be your cost basis. Now, that's usually, um, good to know, because if you sell later on, and if you make gains, you can determine if if I cost me go 1000 $5 my cost basis. But I mean, but when I sold it, I sold it at $2000. Then you know that your profit on that was $995. And then you would know what your tax obligations are going to be. The 52 week highs usually reflected again in the currency, and that's just the highest high, is going to be continuously moving. The 52 week low is similar. It's just the lowest price of which is Security has traded with in the same within the past . Stock traded at, and that's gonna be the same for the high within the past 52 weeks. But was the high so that's gonna be the 52 week high. And in the 52 week low, which just giving you with the highest um, price was for the stock and with the lowest price was for the stock. Bennett treated it. So when we look at the day high, that's just gonna be showing you the highest price at which is to God time. Let me look at some numbers from yesterday and you go to yesterday's numbers, so you start looking at yesterday's information, and then you can see that. Okay, with a stock closed at, let's to say closed at $50 per share, I'm going to use a different number other than picking on 10 it closed at $50 per share, but it moved throughout the day. It, when it's high, is 58. It actually sold as high as 58 norm that day. So that was the day high, and that's what it's telling you. And again for the day low. Let's just group these two together because never moved onto the day low. That's also a currency that's just showing you the lowest price at which is security has traded within the trading day. So again, going back to our example, you can say, Well, the market hasn't opened for today yet, but I'm interested in this $44 so that stock was very volatile. It was pretty swinging all over the place, you know, for stock traded at $50 so that you can see that how the stock moved or the of the security move within a trading day. And then let's just say now the markets opened for the particular day. So when the markets open, you're going to start seeing with the day high and what the day lows are going to be in real time. So, um, that's something that you may want to start looking at it if you're tracking a security and you may want to know what the daily changes are now, finally we're gonna talk about volume and volume is a number. And that's just how Maney shares of a stock has moved within a given timeframe. Um, usually, it could be daily daily, the daily volume. And again, remember, when you're dealing in stocks and you're dealing with shares usually companies air issuing millions of shares, they're issuing 10 million. She's 20 million shares, 50 million shares. It probably can even be 100 million shares, so you can look at it and say, OK, we'll think this stock moved there were 30,000 shares moved within one particular day or there was 300,000 shares on 900,001 million plus years moving within a particular day. And that may provide additional information for you as far as to make an educated decision on whether you want to invest in a security or not. So far, the latest kind of try and put this all together this information that we've just talked about as faras attribution and looking at the attributes of of particular securities when we're either looking in our brokerage account or looking one. Some media platform, some investment based platform. Let's go back to Genia and Lemon Bar. So how company is being traded? So now you see her stop ticker. That is also another attribute that you may see you may see ticker or symbol, Um, as it is, cold and tickle symbol is just pretty much each security A k a stock, whether it's a mutual fund, whether it's ah individual stock, E T f index funds, so four it's gonna have its own unique identify, and that's basically all that a ticker and or symbol is. It is a unique identify instead of listing out the company's full name, it is assigned, um, basically a symbol and so and or ticker. So we're gonna say lemon bars ticker is limited. L E m o n And again, Um, please remember that we're using lemon bar, and this is a fictitious company. So if there is a ticker or symbol out there, that is Elie Emelin. Um, that is just purely coincidental. This is all the the high. It went up as high as a dollar 48 cents. It was down as low as a dollar 14. And so for a 52 week high, it was a dollar, because remember this thing, I p o. And so for the 52 week low, it was also a dollar. And in the daily volume of transactions with 38,743 So you may see that, But then on january 9th of 2036 again, we have fast courted into the future again. So we're just looking at January that was January 8th, numbers of 2036 in January 9th 2036. We're looking at the numbers and you make see on the next day, Mm bar has moved upto a dollar and 26. So the change you see it in green Because a lot of times when you start looking at this stuff online greens going to represent increases and reds are going to represent decreases or losses. Greens are gonna represent gains. Reds are gonna represent losses. It may be different country to country, but this is how it usually is refract reflected, at least in America and on the United States, and or at least in my brokerage account. And so you'll see that the change was a dollar 26 because yesterday it closed at a dollar. Today it's at a dollar 26. So the change is 26 cents. It's up 26 cents from the previous day. And so you see total gains in dollar sign. Since I'm holding, I'm a particular amount of shares. We've gained $52 because we own. If you look to the far right, we've got the quantity of 200. So that's how it came up to the $52. Then you'll see the gangs and percentage we did the algorithm computations, and it came up to I'm up 20.63%. My total gains would be $52. My, um, total gains and percentage will be the 20.63. And then you see the quantity I'm holding 200 shares of lemon bar. The current value would be 252 because I own 200 shares and the stock is trading at a dollar 26 per share. So, really, you could just say 126 times to would give you the 252. And my cost basis was $200 because I bought 200 shares at a dollar per share and there were no fees associated because I'm using my online account and my own line. Burger just so happens to be, um, nice enough not to charge fees anymore for, um, transactions. So now let's go and look one year later, or almost one year later. Percent. So now we're looking at January full for 2037. Now we're looking at lemon bar limit bars kind of gone damn from that January 9th date. Now it's trading at a dollar in six cents, so the day high may have only been a dollar three and in the day low, which would have been debt numbers, should be a little bit different. So I'll take that BET. Number is probably gonna be, Let's just say, um, 97 cents. And then we'll going to say the 52 week high was the $1.26 because, let's just say, um, on January 9 2036 that was the best price limit bar at ever closed at That was the best clothes price that had ever achieved a dollar and 26 set in a 52 week low. Let's just say in between January thes thes timeframes, or at least January 4th, 2036 January 2037. Doc was initially somewhere closed in at 99 cents per seer, so that would give it the 52 week low of 99 sit. And in the daily volume. That's how many shares moved throughout the day. But then, on January 5th, 2037 we come in and from it went down from a dollar six. Now it's treating in a dollar and forcing Percy so they were going to see loss of two cents per share. You're gonna be looking at, um, today's loss, which would be for that day on January 5th, 20 37th. It would be $4 and then you're gonna have your negative, um, percentage of 1.92% and you're gonna look at the total gain. Our gains have dropped them from $52 there were only up $4 per share, and the total gain or loss and percentage would be the 1.92% we still only own 200 shares, and the current value would be only $208. Because you can take 104 times to, you know or times 200 you would come up with 208 and the cost basis would be still the $200 because we haven't bought any more shares that we bought more shares at a different price. That cost basis could change depending in part, Will would change depending upon what the new cost basis that injured that would change our cost basis. Will we actually going to go up because we originally born in and a dollar per share. Never we would be going up to a dollar and four per share, so that would change the cost basis. But that would be how you could look at or how you would look at those attributes when you're viewing it online within your account or one. Some platform that's showing stocks in our stocks performed trading options. So this is another means in which you can make money off of investing in securities. It is also a little bit more complex than and then just the street four means of buying and selling securities I e stocks, bonds, mutual funds, index funds, E T F REITs, um, options. They were similar to insurance. So you're gonna It's kind of a pay to play, so you may or may not. You're gonna You may or may not lose money. You're gonna have to put money up front, but it's kind of like buying insurance to secure a particular position in something. So the, um, I'm gonna run through a few examples in a minute. But, um, the reason why I'm bringing up options is because number one it is a part of educating you on how to invest in the various means in which you can invest, but also to there was a particular case in 2000 and 20 the year two, 2000 and 20 were individual young investor who was trading on his own on an online brokerage platform. He had a self directed account, which means you initiate the trade yourself as opposed to using a financial advisor, way or broker. Um, that works a professional broker. And so he initiated a particular option, and he thought he owed close to seven figures close to a 1,000,000 plus dollars in it. Unfortunately, that individual wind up taking their lives because they thought they were in debt. Options are something that's a little bit more advanced, and I would recommend that you do. Um, either do your own extensive research on options and or talk to a professional advisor, maybe someone within your brokerage account to talk with someone in regards to trading options. But I'm just going to kind of give you an overview of what they are that to that you're going to see is gonna be put options and trade options. So let's just talk about the put options first. So put option is, um, it's an option. It's a contract giving the owner the owner of a security the right but not the obligation, and that is very important. It's the right but not the obligation to sell or sell short a specified amount of an underlying security at a predetermined price within a specific time frame. So let's use this example. Let's go back to this company Lemon Bar, Lemon Bar Stock, Ginny s company. So let's just say you already own 100 shares of lemon bar again. You bought it the initial AIPO of a dollar, so you only paid $100 for 100 shares. So let's just say this stocks guy rockets all the way up to $90 per share limit. Bar stock is hot, and it goes all the way up to $90 per share, so that gives your value of your lemon bar stocks a value of $9000. So you made a $9000 in a relatively short amount of time, depending upon when it went up. We're not going to specify any years on this for right now, so let's just say you're like, OK, I've made $9000. The stock is all the way up to $90 per share. I bought it a dollar per share. So in order to protect your earnings, which you're going to do is you're gonna put a put option on limit. So that's the ticker limit. L E m o n. So you're gonna put a put option out there on lemon? And if anyone bites on that put option, they say, Well, yeah, I'll take that. What you're gonna basically do, it's kind of like insurance on a car. You know, you have some people that they may by, like an antique Corvette and that anti Corvette maybe valued at $100,000. And so someone makes a hey, I'm a put insurance on this car at $100,000 for my precious Corvette. My precious 1972 sting. Great. I'm gonna put some insurance on this thing, So if anything happens to it, the insurance company is gonna pay me $100,000. Even if this car's trashed, Even if this car is just, you know, Ah, Boulder falls on it and nothing's left. I'm gonna get my $100,000 because That's what the value was when I put the insurance on it , and that's similar to what a put option is. So what you would basically do is you would put out a put option and let's just say someone picked it up. So But in order to put this put option out there, it's gonna cost you these put options call. So you have to like insurance you're gonna have to put up. Let's just say, for example, it's $100 so you're gonna have to give someone else $100 to say Here, here's $100. You get to keep this $100 regardless because I'm going to give you $100. But what it is is that on January 31st we're doing this transaction on January 1st January 1st of 2039 or this could be a in a year. But on January 1st of 2039 were going into into an agreement where I'm gonna give you $100 and wouldn't basically saying is that even though I own 100 shares a lemon bar, you're gonna I had the right. If this stock ever goes down between January 1st 2039 December 31st of 2039 or December 1st of January 1st of 2040. So I got a one year timeframe. If this stock price ever goes down, or for whatever reason, I had the option to sell you and you're obligated to buy it because I have the option to sell to you or not sell to you my shares of Lemon Bar 100 chairs. And so we enter into that agreement. And so let's just say the stock market rose along for the rest of the year. And let's say hypothetically, that the stock falls back down to a dollar and 26 cents from 1 December 31st of 2039. So you have one day. You're like, Oh, this stock fell a hard. This stock fell all the way back down to a dollar and 26 cents, but your option. Your contract is still good. So now you what you would want to do or you may not want to do. I don't know. This is your preference, but as the as the one that initiated to put what you could do is you could say, Okay, I want to execute this put option. I want to get rid of this 100 shares at $90 per share, and the other party is gonna pick up this thes $100 a share of these 100 shares at the $90 even though the stock fell all the way back down to a dollar and 26 cents. However, let's look at a second scenario on that. Let's just say limit bar continues to go up. Limit bar surpasses $90 per share. It goes up to $100 per share, $110 percent, $120 per share. At that point, you're going to say I'm not selling or you It would be in your best interests that I said financially financially, it may be in your best interest. You would want to say no, not gonna sell. I'm gonna hold onto my shares. I'm gonna let the, um, the option lapse. I'm gonna let the agreement laps, and I'm not going to take any action at all. So but what it is that you're now out $100 because that's what it costs you your out $100. Other party keeps the $100 so they walk away $100 richer. You walk away with your stock continually rising, so that would be a put option call option. I think you're probably going to get the point. The call option works similarly, but it works in favor for the seller. So I mean for the buyer. So a call option is a financial contract that gives the option buyer the right, but not the obligation. Again. There's that keyword, not the obligation to buy a stock bond commodity or other asset or instrument at a specified price within a specified time period. So again, let's go back to a lemon bar. So we're looking at this example right here. Lemon bar. So, um, we've been following the stock. We don't own it. You don't know. You don't own it, you don't own it, but you're following it. So you're looking at the stock and you've been analyzing it. The stock is at a dollar and 26 cents per share. So you're after you've done some research. You decide to place a call option. You decided to say, Okay, I'm gonna put out a call option for 100 shares of limit bar at a dollar and 26% percent of the dollar and 26 cents per seer. Um, may 3rd on May 1st of the year 2039. So what you're going to do is now, you're only going to do this for six or seven months, roughly six or seven months. You're gonna put out this on May 1st of 2039 but it's going to expire on December 31st at the end of the trading business day on December 31st 2039. So the premium on this call option is $200. So if someone else is, if there's an agreement, meeting of the minds. So you're gonna canned over $200 to someone who owns 200 that has the 200 shares, a lemon bar and then what it is is that now you have the option to by ah 100 shares of lemon bar at a dollar and 26 cents per se er between May 1st 2039 December 31st of 2039. So let's just say you're just sitting so you entered into this agreement, you've handed over the $200. And again, just like in the put option scenario that $200 is gone. What you've done is your paying a premium you're paying is quote unquote a luxury tax or insurance if you want to look at it for the right to buy something at a predetermined price sometime in the future, so we regardless you're gonna be out $200. But you have the potential to make money, so but you have, or do you have the potential to make nothing at all and lose $200? That's why I was saying before, with options, you you had the potential to lose because you have the potential to lose the amount of the premium amount. So in this scenario right here, let's look a scenario one. The stock plummets the 99 cent per share, but however, on December 31st 2039 because once it plummets down to 99 cents per share, your like I'm not buying that I don't want I don't want to buy 100 shares of the dollar 26 cents because this stock is a penny stock is almost jumped. Basically. So you're saying Hey, look, if I buy it a dollar 26 cents per share, that's gonna be I paid them $200. Plus, I'm gonna buy this thing at $4.26 percent. I'm buying 100 shares that will be $126. So now out. $326 the stocks only worth 99 cent per share. That that's not cost effective for me to do so. So you do nothing. You're taking no action. But however, on December 31st 2039 the day the contract expires, lemon shoots upto $52 per share. For whatever reason, we the country, the company's just doing fantastic. We don't know why this stock to shot up, but on the last day this stock shoots up from 99 cents per share or way up to $52 per share . Now, what you would want to do or I would think that you would want to do is you would want to say, Hey, I'm gonna execute my call option. So by you doing that now you pay only $126 to get the 100 shares at a dollar and 26 cents per share. And so Nam a lemon bars in your portfolio and your current value of your portfolio is the 100 shares times to $52 per share, $5200 so you could walk away with net of 5000 and $74 off of the coal option. And that's how a lot of people are leveraging puts in coals. Now, however, again, let's look at the scenario again. If limits start continually, you goes down, you know, in, you know, it said, like around a dollar and a purse ear on December 31st then you it would probably be in your best interest to do nothing. You just say, Hey, look, I'm not taking any action. I'm gonna let you know the option lapse. I'm taking no action because again you have the right, but not the obligation to buy. And so you don't have to buy this. You don't have to buy the stock at that point in time because you wouldn't want it, because now it's only worth a dollar and eight but you you wouldn't want to purchase at a dollar 26. So that's the way puts and Kohl's operate. The final thing that I want to talk about air is trading violations just to kind of wrap up the education portion of it. Um, because when you start to engage in buying or selling securities A K stocks, you must comply with federal regulations in the United States on the Internal Revenue Service and the Securities Exchange Commission. They govern rules around trading to prevent Marcus disruptions and to prevent traders from gaming or should I say, finessing the system to their benefit. And there are many regulations that you must comply with, you know, which could be a pretty lengthy list to go through. But I just wanted to talk about a few of them, you know, that are common to small investors. Again, I'm not trying to scare you away from investing, but these are things that you should be aware of. And I will admit I will admit to you guys and I have violated one of these, and I will talk about which one that I violated, Um, but it's not a terribly big deal now some of them could be big deals, but I just want to make you aware of them so that you don't engage in any of this type of practice. Some of these are just more or less slaps on the wrist, and some of these are pretty much more egregious than that. And again, always checked with a license. Professional broker. Get professional assistance and or legal help in regards to this Because I am not a lawyer . I am not a license broker, but I just want to make you aware of a few of the violations. Ah, course violation number one that I have on this list would be insider trading. An insider trading is basically when an individual has private knowledge that's not available to the public. That's basically it. You know somebody inside the company and somebody's whispering and giving you tips to say, Hey, this is what's going down And the company It's not gonna look good. Dump all of your stocks and you dumped your stocks. If you get quarter, it's found out that you had inside information that helped you to initiate a tree to save you money or make you money you know, because somebody could give you good information about the company that makes the stock go up, and then you buy into it. You know, it could be vice versa or versa. Vice. So you want to be kind of aware and steer clear from those activities? You, um, with this law, insider trading does It helps to protect and make sure that all investors on equal footing you shouldn't have inside information that someone else does not have. That gives you a leg up into buying and investing in corporations where your probability or likelihood of being successful in making money. Um, and others do not have the same access. The washroom. The wash rule is one of the rules that I did violate. And what the wash rule basically is is the wash rule. First, let's just talk about this wash rule. It prohibits selling an investment for loss and replacing it with the same or quote unquote substantially identical investment within 30 days before or after the sale. So what they're trying to prevent here is they're trying to prevent this. This is the scenario. Let's just say you bought, um, listen, I'm tryingto pick something here. That's not obvious. Uh, well, let's just go with this. Let's just say that there's a company that's going to They're creating teleportation devices. It's only, let's just say there's 10 companies in existence that do this. So you're investing in one of them. You're investing in a company that does teleportation. They're gonna be able to teleport people. They're going to eliminate airplanes, cars, trains altogether. So they're developing means for people to teleport from the United States to Africa, Africa, Asia and so forth. So you purchased this company on January 1st of whatever year doesn't matter, but you purchases company on January 1st it let's just a $10 per share. The stock goes down to $8 per share within 30 days of you purchasing it, you sell all of the shares at $8 per share. Once you do that, there's gonna be on your statement. It's your brokers has to generate something that you took a loss on this stock. So they're generating your tax forms for you to report on that form. It would say, Hey, where they actually lost money. They actually lost $2 per share on this particular security But then, let's just say within 30 days you go right back into it and buy it at the $8 per share, and it shoots up to $20 per se. You've actually made money off of the stop. So what the wash rule does, it says, You know, it's a wash. That previous loss that they took that previous $2 loss that they took, they can't They can't claim that lost on their taxes, because when they send you those forms, what it does when you take losses, losses help, too. Bring down your tax obligations a Sfar from from an income perspective. So that's basically what the wash rule does. It basically wipes out the losses that you're trying to claim, and it works similarly to. Maybe you bought one company company. You know the company A who does teleportation, and you took a loss on company A because you found out that company D was actually a better company and they were probably going to be more successful than company A. But remember, look up the definition substantially identical, so by your purchasing the other company within the 30 day time frame before or after you dumped this stock, you're still in violation of the washroom, and that's what wash violation is. And like I said, the washing violation again. I have violated the wash rule. Um, probably about two or three times. And really, it's nothing in my brokerage account, they just flag. I could see where they flagged, Um, a security, as with a W. And then if you hover over this says wash rule, and that's just basically didn't know to find it. Hey, you're not gonna be able to claim the losses from this commodity. I try not to violate it too much. I haven't received any former notifications or anything from anyone in regards to say, Hey, look, you you know, you keep violating the wash rule, you know there's gonna be repercussions for that again. It's just purely to say you cannot clean these losses, but I try not to violate the washrooms so much. But when you're doing short term trading, which we're gonna talk about later on, sometimes you tend to, um, you know, the wash rule is one that you contend to, um violate quickly cash liquidation violation. That is when you buy securities and cover the course of the purchase by selling other fully paid securities after the purchase date. So you know what they're basically trying to do is that they're basically trying to say that traders must have sufficient settle cash in their account to cover purchases on settlement date. Because what can potentially occur is that you may not have the funds when it goes to settle and transfer the stocks from one party to another. Um, you may not have the funds available in your accounts who make those transactions good faith violations, good fate violations or when you buy a security and sell it before paying for the initial purchase and full with settle funds and in free ride violations, free ride violations of when you buy securities and then you pay for them by purchasing. You pay for the purchase of those by using the proceeds from a sale of the same security. And those would be the five violations that I just want you to kind of keep in mind as you go forth with your trading, um, again, wash rule violation. I'm not trying to say that you can't get in big trouble for it. I'm just trying to let you know from my experience, I really haven't had any, um, significant repercussions from it violated it. Probably maybe three times again. It's just I can't take the losses on my, um my tax when I do capital gains capital losses, I can't You know, I can't report it because it's a wash. They just consider it a wash. But I tried my best because I don't like to violate anything, So I try my best not to violate it. But again, Like I said, sometimes when I'm doing short term trading, um, I don't really day trade per se, but I do short term trades. Um, I have been in a situation where I have violated the wash rule. Like I say about two or three occasions, insider trading I would never want to get involved with. I would never want to do that. I would never want to violate that because people have actually gone to jail for insider trading. Another honorable mention that I should mention here is pump and dump, and you probably heard the term pump and dump pump and dump is basically when an individual and usually you have to be a personal influence, um, to violate the pump and dump. Um, because regular Joes I don't see a regular job being able to influence a stock price. Not unless the word just travels around. You create such an outlandish lie that were travels around very fast, so pump and dump would work like this. But let me give you the definition for us, the definition of a pumping nut would be you basically pumping up a stock? Um, e I guess puffing so to speak, puffing, maybe outright lying about, you know, a stock to either make the stock go up, will make the stock. Oh, now, typically, it's to make the stock price go up. You know, you basically make statements about a particular security to increase the securities value , and then once you increase the securities value basically increasing your, um, your profits in the particular security, then you sell it for those gains. And that's why I said you pretty typically have to be a person who has a big spear of influence where you like. Maybe you're on social media and you have a huge following of a $1,000,000 or 100,000 plus followers and you can online and use a X Y Z stock is just gonna be they They're coming out with something that's so fantastic, I really can't tell you about it. But it's so trust me, people, this stock is gonna be great. Or like, you just start basically saying stuff about a particular stock, and then everyone jumps into it big boost the product, the price of the stock. And then you just dump all of your shares because you've made your money out of it, and that would be pumping dump. So those are the trade violations, and that kind of concludes the session, the section on, um, just increasing your knowledge on stop. 6. Stocks 05 Investing Prep Work: The next step in the getting started process is to determine your initial investment funds and determine your future funding approach. So for new investors, what I would recommend is to start off relatively slow until you get a feel for how stocks are traded and how you're going to read. Act to the stock market, whether you're gonna have a lot of emotion involved and whether you can mitigate those emotional trades and start going more logic based trades based on information as opposed to fear or overexuberance. That is one thing that I would definitely recommend. The next thing that I would say is also determined how much money you can't afford to risk . That is very important because you have to remember Tenet number two. You have to assume all funds invested is possibly lost. So think of your money as lending it out to a friend or family members. Sometimes you get it back. Sometimes you do not. Sometimes you get your money back, Um, 5 10 years down the road. Sometimes you never get it back at all. That that's exactly how the stock market can be. You can lose a lot of money in the stock market, or it'll take you a long time just to recoup what you put in and or to start seeing earning . So you have to determine how much money initially you can afford to risk because the markets is about risk and you have to manage those risks with information and logic. Also, remember that nothing is guaranteed when you're dealing with the stock market. This too many variables to many uncontrollable variables that can shoot the market up or shoot the market down. The market can go one way one day, and it can go another way the next. So this is why you have to manage your risk. And also remember Tenet number two, all forms of potentially lost on didn't just start off slow and make sure that you understand the markets and that you can understand that you can afford to take the various risk that you are taking. Also, a stock that looks like a sure thing one day can wind up going bad the next due to either geopolitical conflict war Ah, fire destroying a building, um, unforeseen act of God, maybe a meteor. And look at the cove it 19 Corona virus, Um, situation that occurred in late Thank you. 2000. 19 2000 and 20. The list can go on and on and on. So initially you have to determine how much money you're willing to risk, how much money you can potentially lose. But the gains are there. The market is there for you to make money. You just have to be smart about doing so. But you have to also understand that the money that you're putting into the market is at risk for loss. So never achieve identified your initial funds and you've identified how you're going to fund your account. The next thing that you want to do is you want to devise an investment strategy. Um, I'm not trying to say that you have to have a functional equivalent to a business plan. What, you're writing down volumes of textile information, where you having hundreds of pages documented? What I'm saying is that if you're going to write something now, that's that's perfectly fine. That's a very good start. Um, but it doesn't have to be tens and twenties or even hundreds of pays it. Just make sure that you have something either written down or committed to your memory That says, this is how I'm going to proceed with investing. This is going to be my approach. And remember to these plans, investment strategies do mature. They are evolving, so they may evolve with your, um, as you start to trade and as you get the hang of trading and as you become a more seasoned investor. But just make sure that you understand you've already talked about your funding, so we're gonna you're gonna identify your funding and how you're going to replenish your account. Then you want to talk about your operations, whether you're gonna have a broker manager account or whether you're gonna manage your account yourself being that would be a self directed account where you're going to initiate the trades and you're gonna initiate you know, the other, the buying or the selling off securities. Once you do that, you also wanna have in an entrance strategy and then as well as you wanna have risk identification and then you want 1/2 mitigation strategies and exit strategies. So when we talk about funding, the one thing that I would subject suggest that you do is answer a few questions within your strategy, like you can start off to say, you know, where would you get the initial funds to put in your account? And how would you continue to fund your account? And you've already kind of covered that in the previous sections. So, um, you just kind of want to make sure that you identify how you're gonna get your funding and you know how you're going If you're gonna continually fund your account, whether it's gonna be on a weekly basis by weekly basis monthly basis or just gonna be at heart. So you have to make those determinations again when we're talking about operations, Are you gonna do, you know, self directed where you're going to get with an online brokerage account and you're gonna initiate your transactions or so or are you going to hire someone to invest for you? And if you're gonna hire someone to invest for you, then you're gonna have to talk about mitigations and we'll talk about that in a minute. Now, with interest strategies I like to do is is Lisa's farce for myself. I like to develop some type of logic that says, you know, if this, you know, some type of business rules and or it could be calculations. But you could just say if these factors occur, then by that's what I like to do. I like to sit down, kind of analyze the market a little bit, and then I like to determine what is a good buy rings for particular stop. So in developing or devising some type of logic and how you devise that logic, that's purely up to you, whether you want to seek professional advice or whether you're going to rely on yourself. But I like the have some type of logic, but because that helps me to take out the emotional buying in a particular market whether you get over exuberant because you think that the stock market's gonna continually rise and rise, you know when you're acting on feelings when you buy, as opposed to acting on numbers and logic. So I like to develop some type of rules table or some type of thing that I can reference to to help me with trading, but didn't want to gather those, um, dumb securities. Once you acquire them and even before you acquire them, you're gonna also have some risk that you're gonna have to identify. And I'm not trying to say that you have to sit down and identify hundreds of thousands of risk, but I think you should at least identify some of the basic ones. So just as an example, and I'm gonna cover risk identification and mitigation together because they kind of go hand in hand. So I'm with the risk identification, you may ask various questions. You may say. You know, the overall question is what? What is the potential risk to my investment approach? And then it's far from mitigation. You're going to say, How do I plan to avoid lesson or deal with the risk when they come about? So maybe one example. Let's just take our example. One we may identify risk is that we're going to use a broker to manage your account, and they don't know what they're doing. So you know that is a potential risk that you're putting your hands or your money in the hands of someone, and you don't really know what their skill set is. And maybe a mitigation strategy is the highly vet the individuals before you invest with them, you know, look at their track records, but it also may be to also chicken periodically, actively. Look at your monthly statements. Will have 1/3 party adviser ordered your portfolio. These are logical approaches to mitigating the various risk, and so you can see the other risk that we have laid out here. But you just want to make sure that you identify various risk that you could see popping up for your particular situation and also just kind of having some kind of response that you can have on paper that says, This is how I'm going to respond If this risk occurs. Finally, you want to look at your exit strategy, and I'm not trying to say whether you're exiting out of the market all together. This could be temporary poses, or it could just be exiting out of a particular security. So you may have. You may have an exit strategy all together, like I'm about to retire, and I'm gonna get out of the market or together. So this is my exit strategy. I'm exiting at this age land or under these conditions. Or you may say, if the market is very nebulous, there's something's going on that I don't like and I'm unsure of and I don't know how to read. I'm gonna take a post from the market. I'm going to get out that maybe one of your strategies or you may say I have a particular stock or E T f will read or mutual fund. And if these occur similar to your entrance strategy strategy If this logic occurs, you know, if these rules occur or this algorithm is triggered, then I'm getting out of the market. So that's some of the things this far us for devising an investment strategy that I'd like to take a look at and that I think that all investors should at least identify because it will help you and again, Like I say, these things are going to evolve. They're going to mature as you invest as the market conditions change. So you're gonna have to take various different approaches, as you can see right now, just as an example, we're talking about the year 2020. It's a lot of volatility within the market, but a lot of day traders are thriving, at least for the moment. I'm not saying that they're gonna have long term success because, to be honest with you, I do some very short term trading myself, and we'll talk about short term day trading and all of that later on. But you can make money doing those type of trades and those of the individuals right now that sing or peer to be. Let me just say up here to be doing well because the market has kind of shifted to this newer age where you know the more buy and hold individuals. They're really not profiting. Yes, yet now that's not to say that they're not, you know, holding on to their assets. And you know, next year or the year after next they're buying. Whole strategy isn't working because we're members. Stocks is a long term racism marathon in most cases. But I'm just trying to say that you may have to tweak, or you may see opportunities to tweet your strategy so that you can make short term money or you may tweak your strategy for long term. Success is so we've covered a lot of different things. Right now, we've covered adopting investors mindset, so we've kind of switched out mindset, thinking like an investor we've educated ourselves. So now we know what investing is and what it's about. You know, we've kind of identified the funds that we're gonna use. We have a plan that we're gonna execute going forward now before we get into investing. What we want to do is we want to research the brokerage firms because we're gonna need a broker so that we can go ahead and initiate thes transactions. Right? We need to buy some securities and we need to sell some securities. So now we need to find a brokerage home for us to do so. So let's just take a look at some of the things that we have out there. Some of the brokerage firms and brokerage firm types Number one. You're gonna have self directed brokerage accounts and then you're gonna have managed accounts. So what's the difference? Really? A self directed brokerage account is where you as the investor initiate the buying and selling. And that's usually done either through an online interface, whether you're using a PC or whether you're using, um, your mobile phone application, you can do by and still transactions, and you're the one that's taking charge of initiating those buys and sells. Secondly, you're gonna have complete control with the self directed account. Um, because it's you. You're the one that's gonna be actively going into the account. You're going to be actively managing your account now with self directed brokerage accounts . They used to be like 9 95 $9.95 per transaction. So even if you bought 100 shares, if you bought 100 shares in one transaction, that will be $9.95 or few so 9000 shares in one transaction that would still be $99.95 per transaction. Because it's done all together, it's not per share. So just keep that in mind. But I will say this is that a lot of the, um, online brokerage firms, if you're using, if you're doing self directed transactions, they've gone from $9.95 down to $7.95. Then they went down to $4.95. And then this one platform came along, and I'll mention them in a minute. They came along and they said, We're gonna offer zero fees. People can jump in and start trading for nothing. They weren't charging transaction fees. So a lot of the brokerage accounts followed suit. So now you may see transactions for free for as little as nothing. People aren't charging anything for those transactions so that maybe some of the benefits to doing self directed transactions. But the downside is you have to actively manage your account. And also you're relying on your abilities as an investor, um, to initiate these transactions and you're relying on your knowledge, so that can be a downside, or it can be a blessed, but we're just going to look at it as a potential risk. Now, when you talk about managed accounts, that's where you're gonna hire an advisor and advisor is gonna have full control to buy and sell securities on your behalf. You may tell them what to buy, but typically most people just you know, they have maybe a short term plan, you know, a long term plan. But the adviser will will talk with you, and you can determine how you're going to approach it, because you could have more of a passive involvement or you could be highly active with that broker um so with that strategy is usually going to come fees that are gonna be associated with working with a broker. That's not necessarily a bad thing. You know, the bad thing is, of course, that you have additional fees. But the good thing is that you're gonna have probably somebody that's a little bit more knowledgeable. You know, you're gonna have this knowledge speaks that you can tap into, and they can probably provide you with some thought leadership and some consultation in regards to investing. Um, so those are the two different types of accounts or that you're gonna be able to operate when you start trading now the different platforms as faras trading on those various with those various brokerage accounts you're going to run into a lot here in the United States. I'm just gonna be talking from a U. S. Base. So I do apologize for everyone internationally, But please do your research on your own accounts in or available brokers this in your area . But in the United States, you have I'll talk about the Veer. The latest one is Robin Hood and Robin Hood was actually at least to my knowledge, and I may or may not be correct on this, but Robin Hood was the one. It's an application that most people have on their phones. They were the ones that came out there, the newer, um, platform that people are using. And they're the ones that initiated the zero transactions. And then all of the other bigger MAWR legacy companies followed Robin Hood's, um, you know, um path or guidance on that because, you know, they wanted to remain competitive with Robin Hood. Robin Hood again. It's It's a newer platform and you see a lot of millennials and possibly, you know, the future Jin's ears. They're kind of more attracted to the Robin Hood platform. Not to say that other people don't use it, but I know it's popular with the younger individuals. Um, there are other platforms that are out there. I'm not going to give pros and cons on each of these platforms because, to be honest with you, I have not used them. Unfortunately, the only thing that I do know is that Robin Hood was in the news, at least in 2000 and 20 is far for platform going down. You know this farce for their platform or their servers there up time, not really being 24 7 So I'm not saying that other platforms do not go down, but I know that some people who have had that experience but their platform, but a lot of younger people are attracted to it. I do not know the features of this platform, so I can't really speak to anything else other than would I see in the news. But then you'll have other platforms. You're more legacy Mawr established platforms like E Trade Fidelity, and I must disclose that Fidelity is the platform that I do use. So I will disclose that, um, Charles Schwab, TD Ameritrade Interactive Brokers and Merrill Edge. That's just the name of a few of the more well known, more popular ones out there. But they're probably other brokerages that you can use to trade on, either for self directed or managed accounts. So please do your homework because ultimately is up to you as the investor to pick a platform that suits your needs and your abilities. Because each of these platforms are gonna probably have if you're going to be doing self directed, which most people do each of these platforms are gonna have different interfaces that may appeal more to you and maybe more intuitive to you than the other platforms. Or if you choosing the managed account route, then maybe some of those other platforms in their guidance or their advisers may appeal to you. And they may have certain features that you like a swell. So please do your homework when you're talking about or you're looking to, um, get a platform as faras for brokers account for you to start trading. So never be kind of covered all of the initial stuff we're going to jump into talking about actually doing some trading. 7. Stocks 06 Investing Strategies: We've done a lot of pre work to get to the point where we're now ready to conduct investment transactions. And when one conducts investment transactions there typically looking for securities to invest, then now they're gonna be several factors that are gonna impact the price of a stock. But now I want to focus on some additional influences that may help you determine whether or not you want to buy or sell a security. Let's go back to our initial fitted, fictitious company, Lemon Bar. So Ginny is lemon bar company with the stock ticker or symbol of L E M. O N. Is out there on the market for us to purchase. So it was. We're analyzing this stock and pondering whether it's a buy or not. They're gonna be several influencing factors or we already own it. We may be determining whether it's a selamat some of the things that I've identified, in addition to those other factors that we've kind of already covered, that kind of, um determines the fluctuations in the market. There may be some other things that I look at, particularly in orderto other buy or sell a particular security. One of those things is gonna be the prognosis of the company. And that just means how do I feel about this company or this particular sector going forward? How do I feel about it in the short term? Because if I'm doing short term investing versus long term investing or even day trading, when we're going to talk about those three as well, how do I feel about this company? How do I feel about this company today? How I feel about it tomorrow And how do I feel about it? 5 to 10 years from now, that's gonna play a factor in whether you invest in this company. Do you feel that the the lemon, the juicing with eliminate industry, or any particular industry deter investing, but in But we're talking about limit bar. Now, do you feel that this is gonna be an industry that's gonna pick up and that's going to catch off as a trend, as opposed to maybe people sticking with coffees or other live ations. You're also gonna probably look at the management of the company. How do you feel about the management team now again, as a trader, you're probably not going to get that in depth into the management team because a lot of these individuals are gonna be unknown. But that may be a factor. You may not have enough information to determine on whether X y or Z c oh, and or Leadership team is the best team or whether they're gonna fail. Not unless they make the news, not less suppress release or something comes out about the management team. And would you get other information from maybe people who have inside information or, um, not to say that insider trading, but just they have more information. And you have, should I say that they know the management team and they know, um, how competent, that team, Maybe also, you're gonna probably look at company remarks you do have sometimes some, um, executives that we say are more vocal and they're more in the press than others. At prime example of this, most people are familiar with Elon Musk and Tesla. He is a very, very charismatic individual. He's always in the news. He's always out in the forefront in the media, and so sometimes these factors can play into whether you want to invest in a company or whether you do not want to invest in a company or whether you want to divest in the company . It all depends. Supply chain supply chain. That's something that I think that individuals want to pay attention to when you're tracking a stock. Sometimes again, like I say, I like to create little spreadsheets and or, um, rules that determine whether I'm gonna buy something. No, not sometimes you want to say, OK, let's just take We're going to stick with this lemon bar company Lemon for now, this fictitious company and you may say, Okay, well, let me do a little bit additional research on this company. What is the supply chain look like? What would they involved in? We know that they're involved in eliminate libations. So we know, you know, possibly, you know, maybe we can track down some of their supply chains or some of the touch points that's involved in that, because you may want to know, because if there's a, um, limit if lemons get, um, hit by frost, I don't know. I don't and I'm not very familiar with the lemon industry or anything like that. But let's just say there's a crop that's destroyed and lemon trees are impacted wherever lemons grow. Because you may want to track again, you may say, you know, where is this company getting their lemons from getting them from, You know, within the United States, you know, a Southern area company within the United States. Are they getting them from South America? Are they getting them from overseas Asia, Africa? Wherever. Because this may determine if you're trying to feel as though maybe those their supply chain could be at risk, maybe four disruption. Maybe this isn't a goodbye, and or if you own it within your portfolio and your hearing some rumblings about things that are going on where the supply chain is, then you're gonna want to know about that. And that could effect whether people get out of the stock or whether they stay in the stop dividend payout. That could be a factor, and we're gonna jump into dividend payout in a minute. Also the health of the sector as a whole. Most people are familiar with the coffee sector, so you have various coffee sectors that coffee companies that are listed on the public exchange. But maybe you say well, this lemonade has never really taken off. You know, um is far is becoming a niche drink. You know, whether it be in the United States, whether it be anywhere. So you made that may determine whether you're going to invest in this company or not who the primary shareholders are. Sometimes you're influenced by that, is it? You know, for example, is warm buffet into this or, as you know, or some other well known figures Are they into this? Or maybe you could get information that some of the primary shareholders like Genia, do you know a fictitious character? Genia, the owner of Lemon Bar? Maybe they're dumping their stocks. Maybe she sold off. You know, a lot of her shares. And that may bring concern because again, she would have some inside information that you wouldn't. So you would want to know. Why is she selling off a lot of her shares? That may be a concern to you. Or maybe if you see people buying into it, that may influence you. If you see people divesting out of it, that may be of concern. The company's debt would be of concern to you. How much debt is the company holding our And are they, you know, going pairing with debt. We can look at the earnings, you know, What are their revenues looking like? Are they missing or beating the expected earnings that you know, for the respect of quarters? Who are their competitors? You're looking at sales again. That kind of ties in with the earnings and debt you're looking at the markets that they operated. And then you also probably going to look at the overall valuation of the company because sometimes you may say well, based upon evaluation and the numbers that the company's doing, you know the stock is overpriced. Or maybe it's underprice. So these are things that may be of, um, that may influence your decision, whether to, you know, purchase a stock, whether to not purchase a stock or whether to sell a stock. We talked a little bit about dividend, so let's just kind of died in tow. What dividends actually are because dividends and or they pay out of dividends may influence whether you want to buy into a stock or not. Maybe you want to focus to say, you know, my specific strategy is going to pick up securities that, um, pay out dividends or they don't pay out dividends. This is up to you so but this may be one of the things that you're looking for, but dividends or just basically a sum of money paid regularly, you know, and regularly could be monthly. It could be quarterly. It could be semi annually so forth. They're usually quarterly payouts, you know, by a company toe a chair holders out of its profits. So basically what a company does, it takes it some of its profits, and it distributes them on a, you know, on a routine basis to the particular shareholders So in depend upon how many shares you own , that's how much you're going to get paid. So sometimes you'll see in your portfolio. You'll see if, where if you're tracking a stock, you'll see that the stock pays. Let's just a $3 dividends, so that's $3 per share. If you own Ah, 100 chairs, then every. Let's just say quarterly. Let's just say every quarterly, so every three months you would get $300 because you own ah 100 Sears. So 100 times $3 per share would be $100 you would get that dividend payout. So that's what dividends are. And sometimes those are just additional revenues that, you know, it kind of helps to incentivize for investing. I look at dividends in this perspective. Dividends always great because everyone likes to, you know, get additional money in addition to investing and potentially the stock going up. But, ah, part of what I've kind of observed that I could be wrong. But if you look at the companies that pay dividends, those are gonna usually be your. I call them quote unquote legacy companies, companies that have been around for a long time. And when I say a long time probably about 50 years, maybe from 40 years, probably even 40 I'll say 40 years because I do believe Microsoft pays out dividends. So when you're looking at Microsoft, which came out of thinking what the eighties, you know, maybe even late seventies, but at least definitely the eighties. Microsoft pays dividends. Disney pays dividends, so you have those. IBM pays dividends, which is international business machines. IBM pays dividends, so those companies pay dividends. But also what I've noticed is with those companies is you don't have the ceiling. They already Those Those stocks are pretty much already maxed out, Or at least of the the the share price. The share prices usually already kind of max out. You're not really gonna get that much more out of the stock. Not the Satan will. At least in the short term, that stock may continually rise. Maybe 10 20 years. But you don't have the upside that you're gonna have in some of these younger companies. And when I say younger companies I'm talking about I'm just giving out examples here is like I'm looking at the Ali Baba us of the world. You know, I don't know if Amazon pays dividends yet. I don't think they do, but like Amazons and Googles, and those companies probably don't pay dividends or even definitely. I know Ali Baba doesn't. But those companies don't pay diffidence, but the but the upside to those companies, as far as the potential to rise higher and higher, they have a higher ceiling than the Disney's and the Microsoft and Amazon. I like to look at dividends in this way. You could look at dividends from this perspective. You have like Manhattan and or Beverly Hills. If you're looking for home, I would use the house. Example. If you're looking for home, you may say I want an older, more established neighborhood and neighborhoods that neighborhood and has been around for 50 to 100 years and has proven itself to be stable. The businesses have been there for 50 to 100 years. To school. Systems are already well established. You know what what they are and who this neighborhood is. This neighborhood has always been this middle class, upper middle class or upper class neighborhood, and it's always been stable. It's always had toe, you know, you know, shopping there and the shopping stores really don't change. The school district is there, and the school district is always perform. That neighborhood is solid, however, and then also to in addition to that, if there's ever a downturn in the market like we've had in the housing market in like 2000 and 98 4009 when the housing prices dip, you know that those neighborhoods, they're pretty much guaranteed to come back, and they're gonna be one of the first neighborhoods to come back as faras regaining their value. They're very stable. However, the prices of those homes, you know, the values rise. You know, moderately, you're going to get, like, those 2% gains year over year to, but they're pretty much guaranteed 2% gangs, maybe even 3% gangs. But you're just gonna get you're going to get those stable gains year over year, and it's gonna be a higher price to get into those neighborhoods. Whereas on the other hand, you could say, Well, probably about 10 miles down the street, they're building this brand new mixed use development. So that's kind of like an I p l right? You know, an initial public offering, their building, his brand new community. And this community is there. They're gonna stay, say that they're gonna have some condos, they're gonna have some town homes, and they're gonna have some single family homes. They're gonna have some shopping in there cause it's a mixed use development, and they claim they're gonna build a school system in the area and apart. They're gonna put in a park. They're gonna put in all this stuff. But it's not built yet, and then you go ahead and invest so you're one of the first owners in the neighborhood and you know you're waiting. And as you move into your house and as your house gets finished that they start building other houses around it as people you know, signed contracts to move into the neighborhood, you're going to get in, and it probably more than less likely at us if the homes are comparable. That neighborhood is probably gonna initially be cheaper than the more established neighborhood. But the potential for it to rise is a lot higher. It has a lot of it has a higher ceiling than the other neighborhood, and it all. But it all depends upon what businesses come bear with the school systems. We're going to look like what type of people move into this neighborhood. If the developer finishes the development that they've envisioned, there's gonna be a lot of other variables that's gonna play it, come into place so they're not paying dividends, but they're not paying dividends. But the ceiling is farce for the potential for the home values to increase 10% year over year, or 8% year over year 7% to get those 7% gains than maybe a 4% gain. That may be, but to get higher games all together, so that's the way you can look at. Get not getting dividends, will getting dividends. I think dividend stocks again just to summarize it. Dividend stocks. They guarantee that payout. Um, you know, and also with dividend stocks if you having a bad cycle such as like with the Corona virus or covert 19 of 2020 DeKoven 19 Pandemic of 2000 and 20 Some companies do cut their dividends. Some companies say, Look, we can't pay out the dividends because we really not making that much money. So we're going to slash out dividends were going to slash ARD evidence from $3 down to a dollar, or maybe down to 50 cent. It all depends, so dividends can be cut. But for the most part, a lot of people like to receive those dividend payouts because this additional income that comes in in addition to the stock rising and you're potentially rising, which means that you could potentially sell. But in my personal observation, those stocks never they're already peaked. For the most part, they may have a little bit more room like 10% to go up, but it takes a long time for that stock to do so, whereas if you find a younger upstart stock that doesn't have a dividend, you're really banking on the ceiling of that stock to continue to rise. And you're just looking to get in, you know, on the bottom, or at least as close to the bottom as possible. And that stock has more potential to increase. So now what I want to talk about is penny stocks. That may be another thing that's appealing to investors. What is a penny stock? A penny stock is pretty much would it states a penny stock is a is a common stock was valued at less than $1 net. I will say this. That used to be, um, the common definition, and it may still still be. But now people consider stocks that are valued at $5 below or below $5 should I say, but it's like five or, you know, equal to less than less than or equal to $5. They consider those paintings stocks as well, cause I guess they figure just the value is so low um, those stocks to me are holly speculative. You'll see stocks that when they're in that price, those are usually some very fledgling companies, Um, that they're just very highly speculative companies. Those are potentially companies that could be delisted. They're probably more at risk for being delisted than companies that are already trading in the 19th and $20 range is because they have evaluations up. Which means that the revenues those companies has proven their performance and the stock price is has reflects that. Whereas what penny stocks, the the stock price reflects were there at there at $1 per share. So penny stocks again, you can find some gyms in the penny stocks. And, of course, penny stocks are kind of appealing to some people again. Initially, I kind of got into penny stocks. You know, when you're a novice investor, sometimes you look at penny stocks because again, I'll go back to that rules. You know that mistake that I made you think that you can buy up 1000 shares of a company that's only $2 per share, as opposed to buying one or two shares of a big company like Chipotle a like in my earlier example, the Chipotle stopped definitely proved to be a winner, whereas the other stock did not perform as well because it courses a penny stock. So it's not. It just didn't have that leg room. They are very speculative. They're high risk. In my personal opinion, that's just my personal opinion. And, you know, they their risk for, like I said, the listing because the company has to maintain AH stock price over $1 because if they don't maintain that stock price, if they're below $1 for 30 consecutive days, they can be delisted. So I typically, um, would advise people not playing penny stocks, especially if you're a new investor. If you're a new investor, and if your funds are limited, playing something that's maybe in a $20 range and again, if you can only have 42 to 3 shares, that is perfectly fine. But it's all about finding the right stock, you know, and then when you're definitely a new investor, you want to make sure that your first picks are solid. And then once you start to understand the market and you become more of an expert, didn't you can play around and take more of the risk. But I do consider penny stocks very high risk, their very speculative. But that's what penny stocks are, and they are an option. We've talked about speculative investing when we've talked about the penny stocks because penny stocks of highly speculative so speculative investing is something to that you can do , and it is an approach. Speculative investing is basically the active investing in a stock with a high degree of risk, such as those paintings. Stocks on emerging markets stopped. So let me just give you an example of what an emerging market stock is because we kind of talked about penny stock. So, you know, penny stocks what they are, and we do consider those to be highly speculative investments. So let's just talk about also with an emerging market stock. Maybe because I am involved in an emerging market stock. I have done some speculative investing, and I'll give you the example of the particular company that I am in, and I'm not endorsing anyone to purchase this stock. I'm just giving you, um, an example, because I think it is very fitting. The stock is Virgin Galactic So space travel I'm saying. Okay, well, this may be the next frontier. Space travel is very speculative because it has never been done. Privately, it has been done by NASA and other governments has been done by, I do believe China has done. It has been done by Russia. So, um, competent countries have gone into space, but not privately. It hasn't been done privately. At least not to my knowledge in not for as far from a company perspective where people pay to go into space. So Virgin Galactic's like one of the view that's out there. Um, you, um Elon Musk and Tesla Half Space X. But that's not publicly traded. Or at least it's still just a part of the Tesla brand. It's still it's not its own separate, distinct stock where you can purchase it. So Virgin Galactic is one of the first that's out there. And so I just kind of picked up a few shares to say, Okay, just in case space travel takes off because it seems like that's where everything is trying to go next man is trying to leave her managed exploring Mars. We've been exploring the moon, so I'm just kind of making a bet or play that maybe space travel may be the next thing that's gonna occur. And that's what you would consider to be speculative investing. It is investing in something that, you know, a market that really just isn't there yet. It's a market that is unproven. And so, um, that is an approach that one can take. You can get involved in speculative investing. You cannot. I would say this again, Um, as if you're new to investing. I wouldn't start out doing speculative investing. I would start out doing something else. Um, you know, getting you're getting solid plays in so you can kind of generate or at least increase your probability of success because again was speculative investing. Those stocks of very volatile those stocks are very volatile. You can see the prices go up, you can go down a very they fluctuate a lot. And it's really a long term play, at least for the example that I have given. Another strategy that one can take is you can either day trade. You can have a do quote, uncle, short term trading, which you know kind of throwing in, and you can do, buy and hold trading. So let's just walk through with the various three strategies are day trading is when you buy and sell securities within the same trading day, and or it can be, you know, within, like maybe two days. You know, you buy a security this day, and then you may sell it at the end of the day or sometime during that day, or you may sell it the next day. Um, that is speculative trading because which it basically doing is you're basically speculating that when you purchased a stock in the morning, you're assuming that it's going to go up throughout the day and in your and then you're selling it for those short term profits. So it is. It is highly speculative, and it takes a lot. You have to. That is not passive trading. When you get involved with day trading because it takes a lot of research, you have to know the company. You have to know that, you know, when the um went to jump into the stock and went to jump out of it, and you've kind of done your homework and or research So um, day trading is it is speculative. And it is also not passive, meaning it is active. You're very active as far as being, um um, active in in trading and doing your research so in and also to of day trading, One final thing that you want to consider is that day trading involves higher tax obligations on profits. Anytime you hold investments, stock investments for for the short term. And I think they consider the short term less than 365 days, um that your stock picture tax obligations are gonna be different. They actually treat those as regular income gains because you've held that you've held the security for so low for so short a period of time. It's kind of like when you own a house when you live in a house and you've lived in it for like, I think it two out of the past five years you get you don't have to pay capital gains on that. But if you own it for less than that time period, then they treated as if, really you're using it as an investment to make money. Same with securities, both investing in stocks. You hold it for less than a year They treated as you're doing day trading, you're actively involved as this is the way that you make your living. So they treat that as incoming in the taxes on that is higher. The same thing is true with short term trading. And I kind of threw this one in the term short term trading because this is something that I kind of do. And I think that a lot of people, at least in the communities that I'm involved in online they're really doing this specifically door in 19 4020 during volatile markets doing short term trading and that maybe this is also a gin X take type thing. I'm a generation xer. We're we're not holding securities for 10 and 20 years. You make by him, and you may hold it for a month. You may hold it for four months. You may hold it for seven months, but you're really not holding this thing for five years. 10 years, you're holding the security and then you're making money and then you're dumping it and you're moving into something else. It's just kind of like a just a way where you're just flipping stocks, you're flipping your cash, and this is something that I I will admit that I do. It does have a higher tax obligations to it, and you have to prepare for that because sometimes you'll get attacked. Like when you start generating income, I offer you off of your stocks. By the end of the year, you're going to say, OK, I meet X Y Z money and then you're going to get hit with a higher tax bill that you may or may not be prepared for, So just make sure that you prepare for it if you do short term trading and even day trading , and so it can be considered market timing. But everything is about timing within the market, at least from my perspective. And I'll talk about that in a minute. And in the final strategy is buy and hold trading and you hear Warren Buffett, who is probably one of the greatest traders. Um, he probably will be the in the Hall of Fame if they had one for investing Warren Buffet talks about buying whole trading, and that's when you just buy securities and hold them for at least five years. Basically, you're saying you're saying that I'm just gonna buy this one company, and I'm gonna hold it for, you know, 10 15 20 years and then I'll cashing in. So that's what a buy and hold strategy is and use, um, you Usually, when you do buy and hold trading that comes with cheaper capital gains taxes because you know you're holding it's a long term investment on that. So those are the three different types of approaches that 1 may consider when you're buying , um, your stocks when your trading stocks. So we talked briefly about that market timing thing, and market timing is just basically the act of moving in and out of financial markets of switching between asset classes based on predictive methods. Now, to me personally, the word market time is a little bit misleading because everything in the market is about timing. The purpose of buying in the market is to buy low and sell high. And so the thing is, you're doing your research and homework and you're looking to time that market when that security is down in price and when you think it is a buy and then you're looking to, you know, hold that security. Depend upon whether you're doing short term, you know, um, day trading a long term and you're looking to dump. But the prime example that I would say is this You don't want to let emotions run into your market timing because I've had that dumb with me, Not just with my investment account, but I've done this even with my, um, with my retirement accounts, where you you'll hear things about the market. You hear that? Okay, well, they're anticipating a market crash. You're making an assumption that these individuals are correct. So you go in and you trade out. All of your I've done this. Like I said, within my retirement accounts, where I'll get out out of stocks now jump put everything into bonds or, um, just take everything out altogether and just sit on the side in cash and in the market doesn't drop or it drops. But then it shoots right back up, and it goes higher than the drop. So sometimes those market time those would you kind of consider those market times in a lot of times. And even Warren Buffett advises against trying to time the market and you hear a lot of people say that, and it's kind of true because a lot of something which will wind up doing is your wind up selling. And then you're buying back those securities at a higher price. And as a even as an example, I did that with spec stock, but I was in the Virgin Galactic stock. I wind up. I wound up initially purchasing at, I think, $15 a share when its I p o. And then it shot all the way up to 35 or 40 some $42 per share. I think that was the highest rated it it has ever reached, at least as far as when I was tracking it. And then it went back down and, you know, and I was looking to hold this for long term. So that's why wasn't spooked, because I'm like, Okay, I'm holding this at least for 10 20 years because they're not even launched into space yet . They haven't even generated revenues yet, So once it dropped back down, I wasn't worried. But then when um, covert, 19 came in the cove in 19 Pandemic, I said OK, let me get out of this stock and I got out of it. It I think, 18. So I lost $3 per share. And then I want regretting what I did again. Emotional decision. And I wanted buying back in at 21. So I went from 15 to $21 per share, and I own a lot of shares of it. So you know, my cost basis is pretty high and I'm into it, but it's a long term play for me. So I had to again, I had to go back to my rule that had it update my lessons learned for myself because again , like I say, you'll start trading and there'll be some things that you're gonna do. You're gonna continually make mistakes. At least I consider that to be in a mistake that I made that getting out of it. But, um, just keep in mind that that is an example of market timing, and you can never really time the market. But when you're doing investments, I really don't like that term market timing, but just keep in mind that that's kind of what they're referring to. I think the market timing, coupled with emotional investing, is the, um, is not the thing that you want to do, but you always want to get into the market when you feel as though you know, the the, um your price points are worth getting into. 8. Stocks 07 Investment Account Navigation Demo: Okay, everyone, let's take a look in an actual account and do some navigation. As you can see here, I will disclose that I used the Dell Early fidelity. Excuse me as my broker in that I have a brokerage account at Fidelity again. There are many different brokers out there for you to use. Please do your own research and figure out which interface and well, which services in which company is best for you. Especially if you're outside of the United States. You may not have access to the brokers that I have access to. So again, please do your research. But what I want to focus in here is just some various things that at least I could do it fidelity again, this bay very from broken or broker, which are able to do in your account. But I think a lot of these features are going to be similar. So I'm just gonna walk to some various things. First thing I'm gonna do is so you have to set up some watch list. Um, what I like to do is I like to watch various stocks again when you start investing, especially as a new investor you don't want to be watching all 3000 stocks that are listed on the NASDAQ. You do not want to be watching only 13,000 stocks that are listed on the New York Stock Exchange. Or if you're following any other international stock exchange, you would be watching tens of thousands of stocks literally. You want to start off and probably be a meaningful specific. Maybe again, at first you may start off in probably not even really too much of a meaningful specific. But you may want to say I'm gonna pick various sectors because you want to diversify. So I'm gonna pick some energy stocks. I want picks. Even energy is getting hammered here in 2000 and 20 even in 2019. But you may say, Hey, I want to watch some energy stocks, so I want to pick some energy stock. I want to pick some semiconductor stocks, almost tech stocks, much retail of fun, food, dieting, how much health care so forth? You may want to start off with Onley fives, um, companies, at best from each sector that you're following and then your list will grow as you become very familiar with those five, and you're gonna say, Hey, I'm gonna add three or five more, and then you grow your watch list in each sector again, As you can see here on my screen, I have semiconductor being shown right now and right now up to probably about 15 semiconductor stocks that I am tracking. And again, it took me time to increase my knowledge. Once I got once, I felt relatively familiar with five I increased by mawr and so forth. You may only start off with three and as you could in crucial novice, but you want to become knowledgeable of a stock before you start investing in one. So again, when I've done with my watch list is, I have several watch lists. Have a watch list for semiconductors. Have a watch this protect energy, financials, retail and so forth. Natural resource is I put like gold, copper water. I put a lot of those various companies in their food and dining health care, and so for artificial intelligence. I have my reached that I'm tracking. So I switched to the reach view, and as you can see, I'm tracking a lot of different REITs that are out there. So let me just back up real quick and let's just go to the energy sector. Let's just say right now you're like, OK, I want to start tracking some of this because of energy is really getting hammered now, But there may be some potentially good byes in energy sector. So let me just start tracking a few you could never want. Or maybe first, you may say, let me create a watch list. All I do in my account is I click on new watch list and and I could just start populating symbols in here. This Just see this probably won't pop anything up, though. There is that some of our and what company is this? This is Red Rock Resorts Inc. And then you can enter a quantity if if you want, you don't have to. These fields are not, um, mandatory. You can put in a purchase price if you want. You can put watch closely and you can click on watch closely if you want, or and then right here just shows with the latest or last price to stock was that you can also even set alerts the how alerts work is you can sit on alert to say, but right now the stock is at 12. 12. 07 And then you could say if the stock decreases above just to say $14 then you're gonna get an alert. Probably gonna get an email that's going to go to your email account that you have a link to your brokerage account. And then even here, too, you can put in notes here we put in some kind of note that says, Maybe this stock is hot and you can probably hear me typing, but this is what demonstration purposes, and then you can put that you can. Now you've created a new for this stock, and then you can close that out, and then you can just add one more and more. Now, I will say this to a lot of times as you enter the men, you're some. Your companies are not gonna be in alphabetical order, so I could say this and then I would have to get this watch list. The name I could maybe say, um, be areas. Maybe I'm just gonna put a bunch of the area stocks in here and then did you can see I couldn't put down back and sent an alert to my email address. And by the way, if you want to email me, please feel free to do so. And then you just hit the save button and then that would save all of your information. I'm not gonna create this list. But that is just how do you create a watch list which you can also do? Here is I have my energy watch list. I can edit my watch list. I can click up here and I can say okay for some of these. I want to start doing some tracking. Now, you see, here I have Tedy, Any corporation, they just went through bankruptcy and restructuring. So maybe I'm saying, Oh, I want to start tracking this because this stock was kind of down even below this mark earlier, because when they went through the bankruptcy, I can probably say, Hey, I want to track this. I could put in a notices it. It increases above 12 list of think $10 30 boxes. If it increases above, then send me a notification because that's when I want to buy or you may say, Hey, it decreases if it drops even further because I don't think this company is. I don't consider $10.22 A by maybe at $8 that I consider it a by and $8. I'm going to get an alert. And again, you would have your alert come up here and you would select where you want to be alerted, and then you would just update would just hit your save button. And it would update, um, this particular watch list. You can remove stocks from your watch list, simply budgets going in there. I just highlight the stock, and I just hit the delete button or you could do back space for space. You can do whatever it is you want to do, but you can eliminate things from your watch list. I like to put mines and out for bed ical order because sometimes when you use the app, the Fidelity Act, it will be in alphabetical order. But it doesn't default toe alphabetical order. If you just start randomly adding in stocks to a watch list, you have to use the sort button to get him to, um to appear in alphabetical order. you have to click on the headers attributes. You have to click on the symbol toe, actually, for the name to actually put him in alphabetical order. I like to put my symbols in alphabetical order, so a lot of times I add stocks in and then I'll go into the watch list and then I'll just start modifying by putting them in alphabetical order, which takes just a couple of minutes. But it's just clean up that I like to do. It just gives me a default, do you? I don't have to look for things, especially when I'm on my tech because my tech my Tekle, is here used to be crazy, and I used to have symbols all over the place. And sometimes I'm looking for things and they're not alphabetical order again to keep in mind. If you do set up watch list, sometimes you wanna watch because going to your watch list periodically because some stocks will drop off of the stock exchange if they get delisted. And we've talked about that, but then also stopped when we talked about penny stocks. Stocks can get delisted also where they could get delisted for various other reasons for fraud, which accompany right now is kind of going through, or they can merge with another company, and then the stock gets absorbed. So the ticker that assemble a K A ticker goes away. So these are just things to keep in mind. You can delete your watch list, you can click on delete. Or you can just start clicking here, highlighting um, particular rose. And then you can go through various sneers, whether to delete, add alerts and so forth. Now I think we've talked about the watch list, and it's good. Like I say, I used watch list because it allows you to track just a particular stock that you have in mind the particular stocks that you want to focus on. But what you can also do here is you can say, Hey, well, I'm looking at these various stocks. Um, let's let's go to a different list here. I don't go to my artificial intelligence in. You can come up and say, Hey, I want to look. Give me some more information about Parker Hannifin will. Better yet, let's pick one ux. I want a little bit more information about that, and let's just say this wasn't on your watch list because you can also type stuff into your search tickers into your search Here. Over here, you can type. Why e x t and you type in tickers here, you'll get them here and then you can just click and say, Go to this page and it's going to take it to the research page and it just gives you all of those attributes that we talked about earlier. Um, it just lets you know that this is just showing you it was down. It closed down from its other previous close price today. Before this again, it was the day brains did it trade it in and so forth. We talked about these attributes from earlier. It's just so do the last giggling range that traded in. This is a 52 week brains and so forth. So maybe you just want some information. And also here to the thing that I like that that my broker shows me and maybe other brokers show you this is well, is that they kind of just give you a summary school of how other industry professionals view the stock, whether they view it as a buy, You know, a Bayer or bull. This is relatively low, but you makes it hate. Look, I really want to track to stop. Yes, As you looking out here, you're looking at, um, just graphs and your diesel bomb, your visualizations and as you doing your homework And also here you can see here the earnings you can see that they missed for Q three of 2019. They missed earnings. Three expected earnings per share. Here they beat the earnings again, they beat the earnings. You may start Indian also to they'll show you the top competitors. So you talk competitors yet least in my brokerage account, and they give you company profiles. You can also to find out if they pay dividends through, um, this page right here when you click on the stop. But let's just say you wanted to add this to your watch list, which you could just do here is now. You could just say, um, watch list. It has the plus sign for the watch list, and then you can choose which watch list that it goes to. And I already have it on my artificial telling this one. But let's just say I wanted to add it to financials. I would just click here and then I would click the add button, and that added to my watch list. But I'm not gonna do that because I already have it on my watch list. But let's just say now what I'm gonna do is I'm like I'm ready to buy this 16 31 is appealing to me Maybe I got some new information about this company from doing research. Maybe a press release or some news came out about this company that's making me feel good where I'm saying the likelihood of being successful, whether it's short time trading or long term trading. Whatever your strategy, maybe for whatever reason, my logic is telling me I need to buy next nail. So what I would just do is I would click on the buy button over here, or you can do it through your main interface, which is going to show you all of the all of your holdings. I'm just doing it here, but it is going to show you your main You can come here and then you can just select which account that you wanna, um choose from, so you got select account. If you have more than one account, you would just choose. Where do you want to pull your money from? And then you would come here and do whatever action you're gonna do. A by you would put in a quantity how much you want to buy. Maybe you can only afford 10 shares. Maybe you can only afford to shares. Maybe. Maybe you're like, that's all I could afford. Or maybe you can afford Ah, 100 chairs. You would just put in or 1000. He was just put in the quantity of shares that you want to put here. You would come down here and also or you could do. You can say, see all shares, you can see all shares. But right now you're just going to do a by and you're gonna buy 100 chairs. And then right here, you can do market order, Limit order, Stop loss, Stop limit. So what you're gonna do is you would do. I sometimes do market order. That's just whatever the market is. Whatever it's trading at, whatever the demand is for the stock, that's what I purchase it at. You could do a limit order, and you can limit the price to say the stock is at 16. 31. I'm gonna buy it 16 45. And I'm not gonna pay a penny more than 16. 45. That's gonna be your limit. So that's what you could typically do when your trading and then you can put in the time you know it's good till it's cancel. You could use all these various different attributes down here, and you can expand your timeframes. And then you can also add in conditions you could say all or none, although none just means you want to buy 100 shares. You do not want them to fill in order. If, if someone is not willing to give you 100 shares of someone is only willing to give you 97 shares, then it's not gonna feel this order. You want 100 shares, and then you can do previous order and execute, and that is similar to when you're selling a stop. When you're selling a stock list, you see clicking on the X. Do it this way that we have had a double click. But if you if you wanted to sell yet he had next in your portfolio, you can have it. You don't have to do it through this interface. You could really execute this through your main interface, which if you've got a trade, it would show you what your account positions are, and it will show you everything that's in your portfolio. If you held onto the X of the X was in your portfolio, you could didn't execute a cell. Next was in your portfolio. You could execute a cell, and then right here, you would just select which account. If you're holding it in multiple accounts, you select which account you wanna Cellex from, and then you come down here. That's just a symbol. You just come here and then you could say, maybe you only want to step. Maybe you own 100 chairs, but you only want to sell 33 of you want to sell 1/3 of your shares, you can enter in 33. Or you could just say, sell all shares. I guess because I'm not holding X, Let me pick 11 that I'm only Yeah. So see, since I own this stock, it'll allow me to sell all shares so I can just click on sell off shares and I could do various types of cell actions. I could do a market order, which means whatever is going for on the market, let's just sell it at that. It last closed in 18 21. So today is a Sunday that I'm doing this so that when the market opens, whatever the market's gonna open at whatever this stock is going, command come opening Monday morning, 9 30 Eastern time. Just so I don't know, I just want to get rid of this. And whatever the stock is moving at, it's what it's gonna sell, that it could move for $28 tomorrow on Monday. I don't know how that's highly unlikely, very highly unlikely, since the stock is at 18 21. But it could, or it could sell for $3 shape. That get is highly unlikely because the last time the stock closes at 18 21 so it's probably gonna trade somewhere around there. Give or take a couple of pennies, couple of dimes, maybe even a dollar, but it's gonna trade somewhere around this 18 21 and I could just say sell off shares for the market order so it may maybe it's gonna open it it 18 03 or it's gonna be down, 18 said. What could 19 6 and close it? 18 40? Open it 18 4 And that's what it's going to sell it if there's a buyer out. What I can do is I could do a limit order. So do your limit orders and then you complacent. This just tells you what you can hover if you say what is the limit order? I don't know what these market orders are for. These limit orders are you can just hover right there, and it tells you Limit order lets you into a price per share. You can buy at or be low to a stated limit price, but never above it. You can sell at or above your stated limit price, but never be low It and that's put a limit. Order is, I need you, makes ahead. We'll look, I saw something else down here. I want to stop my losses. What is a stop loss and it'll you want to hover over here. It should be able to tell you what a stop losses as well. It's not going their stop loss e stop orders a generally used to protect a profit or to prevent further loss if the price of a security moves against you. So these are with these are so that you can just use your stop loss and stop limits. I very rarely use, um, stop losses because typically, when I trade, I know what I'm trading at. I've made use a limit order. I may say, Well, yeah, You know, I want to get rid of this stock, but if it doesn't traded this price, then you know I want to do a limit to cancel the trade, so I will use limit orders. I very rarely stop boars. That's just me or stop losses. I very rarely used those. So again. Just check with your brokerage account, your brokerage account, that they should all be around the same language in lingo, but still, just check with your broker. But that would be how you would execute your trades. 9. Stocks 08 Final Tidbits: We've covered a lot of information to help you get started in investing, and I'm sure that you are ready, willing and hopefully able to get started to invest. But before we conclude, I just want to cover some final tidbits in relation to the stock market and in relation to investing. Um, the first tidbit that I want to cover is when to take a loss. Some people may think that it's not OK to take losses, um, when your trading. But there are times when you may want to consider taking a loss. And here the three reasons that I personally think that people should think about taking a loss. Um, the first reason is when a stock's performance history just isn't living up to the expectations. Sometimes you'll hold onto a stock and, depending upon your strategy, your approach, whether you're going to do day trading, short term trading or whether you're going to do long term trading or what other algorithms and other strategic plans that you have, and only you will know that because each person's approach is going to be different, the stock's performance may not be providing the, um, returns or the benefits as of a supposed to getting rid of it and just taking a loss and moving on. So sometimes in those respects it's it's actually a good thing to dump a stock and just move on. Um, the second thing would be when you want to realize capital losses for tax purposes and a lot of times that's gonna be coupled with it could be coupled with number one. But it could be coupled with a lot of other things. A few other scenarios as well as well as all of these could be so sometimes Justus farce For tax purposes, you may hopefully you'll have successes in previous investments and you'll make a lot of money. And you may say I want to bring down my tax obligations a little bit. So how can I do that? And then now that may be a good time when you say, Well, okay, in addition to, you know, realizing, um, you know, lessening my tax burdens and bringing down my capital gains. What I'm also going to do is I'm gonna dump some things that just haven't been living up to expectations as we went over with the first with my first justification for taking the law . So in that scenario, you may want to dump stocks just in order to pay you were taxes again, that these are things that you're gonna have to check with, how to do your own personal research on or check with US certified public accountant or check with a financial planner and so forth. But these air scenarios, when you may think that you want to take a loss on a stock, the third scenario would be if a stock's corporate outlook is bleak. So prime example. There's a lot of retail stores that are just going under or some stores of filing for bankruptcy. We had one scenario where, um, for example, luck in coffee, which is a competitive to Starbucks. They actually was found guilty of, um, fraud or, you know, kind of fudging their books to make their profits seem more than what it waas. And so for those purposes, you know when when things like that happened, the stock immediately went down from, like 30 something dollars per share, all the way down to a dollar per share, and this happened in less than I would say, a month, a month and 1/2 the stock was frozen. Um, they could. That's investors blocked in. Stocks got frozen, people couldn't trade it for a while, and then it just went down to a dollar. And then they got delisted from NASDAQ. So in those type of situations where stocks outlook is bleak, or maybe due to some pandemic like covert 19 or due to the housing crisis of 2009 or some other equivalent catastrophe, you may think about dumping a particular security. And finally, you just may want a free up capital for investment that has a better financial outlook again. Remember I was saying before I was talking about how I like to cash my cash. I like to have cash on hand to invest in other things, but sometimes you may see another investment where you can say, OK, why have some cash sitting on the side that I could invest? But maybe I just want to buy mawr of this other particular whether it be a I p o or another stock that's come upon your radar and you're like, what? I need funds, and how am I gonna get those funds? You may say Well, let me look at my portfolio and let me look at some things that haven't been living up to expectation going back to that number one when the stocks performances in meeting expectations. So you may decide to say, I'll take a loss on this stock Jessel, that I can purchase this other one because I think this other one has a higher ceiling. There's more potential for me to make money over here as opposed to over here, so I'm willing to cut losses in order to make gains. So those are the scenarios that I've come up with. But when you want to take a loss and again, you always want to check with your financial advisor or do your own research on taking a law. So anything that I'm telling for that matter, the second thing that I want to talk about is the best daily transaction times. So this again, this is just something that I personally have figured out due to my observation of the market and due to my experience trading. I'm not trying to say that this is absolutely correct. This is just an observation that I have experienced, definitely get into the market and try to get a rhythm or look for patterns in how the market moves. What I noticed is is this. Let's just take IPO's initial public offerings. So when I Keogh initially comes out, if you have high confidence in the probability that that I po is going to be successful, whether it be short term, long term that I would say by as soon as that stock list as soon as that stock hits, um, either NASDAQ with the New York Stock Exchange A. What? Ever ever extinct in trading on national nationally in the U. S. Or internationally. Whenever that stock initially list, I would say jump in if you have a high probability that it's going to be successful because typically, if the stock starts out at, let's just say $20 per share, it is, ah, hot AIPO. It could immediately shoot up from $20 per share, all the way up to 60 $70 per share in one day. There's a probability there's also the probability that it could go down. But if you feel if you have high confidence that it's gonna be a short or long term play for you definitely get in as soon as the market opens. However, if you have moderate confidence, moderate to low confidence in the probability that you know the stock is going to be, you know, successful. If it's just a Luke warm AIPO, then I would just wait throughout the day and just see how that stock does. You know, it's farce for I p l. And it may be your you're gonna wait a couple of days or even some weeks or months before you jump into that I p M. But, um Justus Faras daily transaction. I would wait on those if you're lukewarm about it, talking non IPO's just stocks that have already been listed for a while and they're out there. Um, this is my scenario on that. If the stock is not an AIPO and it has been revealed information that severely changes your confidence in the stock's value out positively or negatively, then buyer cell at the opening of the market because when I mean severely, I mean, like, you have information again, like the looking coffee scenario where you know, this fraud involved, and so there's gonna be some egregious action taken against what you find out that the company is going bankrupt in, they're just gonna shut down operations. Or maybe that there's a covert 19 type situation or the housing market of two, 2000 and nine comes about some similar situations like that. Then it's best to kind of get out as soon as you can, because, ah, lot of times those stocks just plummet, the prices plummet and they just continue to go down. If you plan on riding it out, then find do nothing, do nothing at all. But if you must sell, I would say Dump immediately. First thing in the morning if you're going to ride it out. Desk in. It's a long term play for you, which I mean long term. It's a five year play, 10 year play, 20 year play. Don't do anything. This is just about selling scenarios. Andro buying scenarios. But again, if this a severe action, you have information that severely changes your opinion positively or negatively. Get out first thing in the morning. Now, if it's not an I p o. When it has been revealed information, it moderately changes your confidence in the stock's value, whether positively or negatively then I would buy or sell out there two hours after the market opens in a market in the United States state. Typically open it 9:30 a.m. Eastern standard time, Um, or I would get out or get in five hours after the market is open, like so, so kind of towards the end of the day, around one o'clock even. Sometimes wait until 3 30 let final hour when the market's going to close. And the reason why I say that is this. Sometimes this will happen sometimes. Ah, stock. There may be some information. It comes out about a stock, whether it's positive or negative. And the first thing in the morning, especially after the weekend. After the weekend, there may be some information that comes out during the weekend. It's always during the weekend that things information gets revealed and then I shouldn't say always, always is an absolute, but a lot of times this information it comes out on the weekend that changes people's outlooks and opinions, or even if this at the close of the belt, and then the next day the market's gonna open. A lot of times people will start if It's a negative situation. Ah, lot of sellers, holders of that security will start dumping stocks early in the morning and when they start dumping, their forcing the prices down. So you'll see that mass dumping like early right around 9 30 you'll start seeing the price just go down, down, down and then around after two hours of after, people have kind of calm down, and there's the motions of calm down. Maybe people start listening to television and analysts start trying to calm people down, Um, and or maybe some, um, government officials, whether it be through the Federal Reserve Bank or the president, information starts coming out. People start trying to calm the markets, then you'll see that stock plateau off, and then it'll start going back up. So that's why I say if you're gonna sell, I would wait in no situations because a lot of times, if you sell immediately once the market opens, then you're really gonna be selling very low. But if you kind of wait it out, that stock will get down. But then it'll get back and it'll kind of come back. I'm not trying to say that it's going to close up. I'm just saying that it may close up, but then it won't close. As bad as that early morning dip, often times. This is just what I have observed in those moderate informations. And again that has to do also do, if buying so sometimes securities you may want to buy. But sometimes by first thing in the morning is not necessarily a good thing, because again those prices, it'll happen in reverse to the a situation that I just gave you. Those prices will shoot Oh, and those prices will go up, up, up, and you'll be buying at a bigger premium. And then two hours after the market's been open around 11 30 then that stock will start coming down. The price will come down, So if you buy early in the morning, then you're gonna buy high. And then by the end of the day, you're gonna be negative. Probably there's a probability for you to be negative. There's a probability either way, but in my personal opinion, I've seen that always happened. So that's why I say wait about two hours into the market, or like five hours into the market before you start taking action in that type of scenario else. My other scenario is if the stock is not an I P O and it doesn't fit the two scenarios that I've just listed before trade four hours into the markets open or during the final hour of the markets open and again kinda ties in with the second scenario. And that's typically because markets will start comin down. If you're unsure because that if you're not in it, um, where you're highly motivated or your moderately motivated, that means you're kind of unsure. Just kind of waited out weights about midday. See what's going on. Engage with the market is doing because then you may pull back. When your sentiment to buy or your sentiment to sell them, you may decide. Okay, Now, I I wait till tomorrow. I think things have calmed down enough where I can wait this thing out. So those are just my tidbits on the best daily transaction times. Finally, the thing that I want to talk about is taking profits. Now I will say this. I will admit that investing for me has kind of been addictive, Um, in the sense that when I first started. I was using my investment account as a means really to, you know, kind of keep my savings because I have noticed that, you know, I wasn't really earning that much money in, you know, my savings accounts or money market accounts. You know, with the interest rates being so low near 1% you know, you could have tens of thousands of dollars in the savings account, And it's not even bringing you that much money. So this is just my personal opinion. So what I just did was I said, okay, I'm going to start investing and the kind of generating quote unquote interests like money via that kind of making my money work for me by putting it into a broker to count. And that was my way of generating interests. Quote unquote on my money. Now. Well, I will say this is that it wasn't necessarily mitt toe kind of operate where I was just gonna keep the money in there. But it seems as though the mawr more money that I mean, the more miles hesitant to take it out, the more more I just said, I just want to keep it in and I just want to keep adding money to it, adding money to it. You know, whenever I can and I just want to continue to grow my money, and that's a good thing, you know, because it shows that you're not additionally saving money when you can. But you're also making money through investments. Hopefully, you're making money to investing, Um, but sometimes it's good, You know, after a while, once you've grown your money enough, I will say this once you've grown your money enough, especially if you're a young investor, you're in your twenties and you just have a brokerage account that you're playing around with, not your retirement account. But if you just have a brokerage account that you're playing around with this non retirement related, sometimes it's good to just go ahead and take 10% over 5%. Well, maybe 20. You know it's up to you. I can't engage what you know your particular situation, because everyone situation is unique or different. But I would say take about no more than 10% of those funds will, if you generate $100 in profits sometimes, and I'm not trying to say every time, but sometimes take $10 put it in your pocket because those those monies buildup and what it does is by taking profits. You get to enjoy the fruits of your investment successes and by enjoying the fruits of your investment successes, you're kind of making the connection between the emotional connection. Should I say between inv besting in the stock market and money and are being able to buy things and treating yourself toe, whether it be a luxury good, you know, whether you know, be his some apparel that you want to buy, whether it be to put money onto some bills that you may have or whether it just be the bias . So treat yourself out to a dinner or something, but you're able to make that connection between to say that my investing got me this. My investing got me this and I know what's a material good, but that's what we're here for on this planet planet. I'm not trying to say we're here just for material goods, but a part of what we're here for us to enjoy life and have life experiences, and if you're investing, allows you buy, you just taking a little bit of your investing, and if that helps you to, you know, take a trip or by item that you've always wanted, then I think that if you're able to make that connection, you'll invest more specifically more so for younger people, people in their twenties and even if they're in their teens and they have a brokerage account. But I think you're able to make that emotional connection. Also, you can contribute to your expenses if you have personal expenses, such as a car kind of mentioned that in the previous scenario, if you have a car or if you have a mortgage or if you have student loans or you have you no utility bills or you know some type of bills, it's credit card bills if you're able to help pay for some expenses and that 10% of those profits helps get you, that all those capital gains should I say helps get you that and helps, or at least contribute to paying for those things, then that's a good thing. That's what the money is there for. You've made the money. I wouldn't say take all of your profits because you want to reinvest so that your account can continually grow because the more more you make, you want to eventually get to that point where you can live off. You're investing. Some people actually do that. Some people actually make enough through investing in the stock market that they can live off those investments, or at least it they able to make $30,000 per year off of that. It's a kind, like a part time job, so you kind of want to get to that point. But take a little bit and help pay for your expenses, you know, and it also helps you increase your personal wealth. That's the final thing that I want to say. It helps increase your personal wealth by allowing you to generate those funds and maybe take 10%. And maybe you want to slide that over into your savings account to say, Look, I'm taking this out of the market. The market has risk to it my savings account or my checking account with my money market account that doesn't have any risk. Then it or even a retirement account. I'm gonna slide this money over there because there's no risk. There's minimal toe. No risk involved in those accounts. No size from those accounts possibly getting hacked. You know, God forbid. But you kind of want to make those profits because you want to be able to tie in again. You're investing to success because a lot of times you can get caught up in just investing , investing, investing, investing, investing And and again I will say this, at least for me. It has been addictive where you just kind of you don't want to pull any money out. You just kind of like I'm just going to continue to put money in there. But sometimes it's good to take money out where you know you can kind of treat yourself. I'm at the point where, um, you know, I'm in my 40. Should I say You know, I don't really need too much other stuff. You know, I have my regular gigs and other income that I do make other streams of income. So that's why I continue continue to leave my money in the market. But definitely I just want to get to the point where the market is actually working for me as a job where it's full time functionally equivalent to a salary that I would be making out, you know, in the work world. So that's why I'm leaving my money. And so hopefully I can build my personal investing account up to that point. So that's all I wanted to say. You've reached the end of this presentation on introduction to the stock market investing. I do appreciate and respect. Um, your time. And I do appreciate the fact that you have listened to me and allow me to be the one to kind of give you information on investing. I do have a platform A. J. Smith 3 65 dot com, where I talk not only about investing in real estate, but I talk about investing in the stock market, and I also talk about, um, just professional development. So it so that you can kind of create multiple ways or means of making money. So again, my name is a J. Smith. I do appreciate your time, and I do. Thank you for listening to this presentation. Introduction to the stock market investing. Thank you