Understanding the Stock market can be a very time consuming task. We have simplified some of the more common terms to help you get started.

Q: What is a stock?
A: A stock is a certificate of partial ownership in a company. Many individuals (investors) also known as stockholders, buy stocks in hopes that the company will grow annually and a new buyer will want to pay more for this larer company than their initial investment. At retirement, if you have 1 million dollars invested in stocks, and you get a 10% rate of interest on those stocks, means you will get approximately $100,000.00 per year in payments. Minus taxes of course. Some stocks also pay interest (dividends) each year also.

Q: Should I buy stocks?
A: That is completely up to you. When you do eventually get a full time job, you should consider investing 15% of your income for future use. Some of your money should go into the stock market, some into a short-term savings plan (for emergencies you should calculate 6 months income and set that aside) and then saving for long-term investing for what old people call retirement. You know what retired means? Your tired again! Get it... re...tired! Anyhow, long term investing should include stocks. Also a home would be a wise investment, versus renting, as you wont have to pay as much income taxes.

Q: Where can I buy stocks?
A: Walmart? Not yet anyway. Online purchasing is becoming a hot new market but beware of any advertised fast and easy way to make lots of money. The stock market is for long-term investing. The shorter the time in the market, the higher the risk of loosing that money. See your yellow pages for local businesses that can help you invest until you know what you are doing. Make sure that company has a proven track record of quality results.

Q: How old do I have to be to buy stocks?
A: You can own stock at any age.

Q: Should I have a balanced stock portfolio and what does that mean?
A: You dont want to, as they said in the old days "put all your eggs in one basket". Dont put all your money in 1 company. I had a friend who invested all of his retirement stocks in the company he worked for. That company went out of business a couple of years before he was supposed to retire. He is still working past his retirement age and unfortunately will be working for the rest of his life.

Q: What is the Stock Exchange...
A: A place that manages the stocks such as the New York Stock Exchange, American Stock Exchange, and Nasdaq.