What is Stock Market?

A market for the buying and selling of stocks, such as the New York Stock Exchange i.e. where stocks (shares) are bought and sold. A share is a portion of the total ownership of a corporation. The more shares you own in a corporation, the more ownership you have in that corporation.

Stock Market Index

A representation of the value of securities that constitute a given market sector or industry. Indexes often serve as barometers against which financial or economic performance is measured. For example, the Russell 2000 Index is a popular representation of Small cap stocks in the U.S. against which many Small cap mutual funds are benchmarked for performance. The Dow Jones Industrial Index is the most widely followed representation of the performance of Large cap stocks in the U.S. The Standard & Poors 500 Index (S&P 500) is probably the most popular index used by professional money managers because it is deemed to be broadly representative of Large and Mid cap stocks in the U.S.

Important Tips for Stock Market Investors

• Do not overtrade.
• Do not trade on rumors.
• Do not trade in all stocks of one sector.
• It's better to buy the wrong stocks at the right time than to buy the right stocks at the wrong time.
• Trade with the trends rather than trying to pick tops and bottoms.
• As long as a market is acting right, don't rush to take profits.
• Don't buy something only because it is low priced.
• Money cannot be made everyday from the markets.
• Avoid making average, when stock is coming down.
• Don't watch or trade too many stocks at once.

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