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Stock market

The stock market is an institution where shares, small fractions of a corporation's stock, are bought and sold. Those who trade or invest with the stock market often have a broker to do the transactions for them. On most days, it's usually a very slow game of speculation.

Basic knowledge

Trading hours

Stock market index

A stock market index measures the value of select stocks in the stock market. These indexes/indices are just ways to analyze how the overall market is doing nationally or within a certain region. For the most part, they are benchmarks that traders and investors can use to compare their portfolios to, though it doesn't have much use outside of determining where the entire market or certain sectors are trending.

  • Dow Jones Industrial Average - This index measures the average of the Top 30 stocks, traded on the NYSE and NASDAQ. It has nothing to do with industrial stocks today, aside from name only.
  • NASDAQ Composite - This index weighs over 3,000 common equities listed on the NASDAQ stock market. It's often said that a majority of these are IT companies.
  • S&P 500 Index - This index weighs the 500 largest companies traded on the NYSE and NASDAQ. Unlike the others, this is said to be the best representation of the U.S. stock market and economy.

If you're a fan of stock market crashes and bear markets in the United States economy, do take note that the NYSE has implemented “circuit breakers” (trading curbs) to prevent another 1987 Black Monday. The first two levels are at -7% and -13% which both trigger a 15-minute trading halt, unless the market close is near, while the final level is at -20% which forces the stock market to close.

Market trend

A market trend refers to perceived patterns that are use to predict a market's direction. The primary two trends are bull market (📈) and the bear market (📉), which are named after how these animals attack. In other words, a bull expects a market to go up, while a bear expects it to go down. It's useful to analyze charts and identify trends. If you can't, then watch the two fight, but take what they say with a grain of salt.

Brokerage firms

Remember: Invest at your own risk! If you do invest in stocks, be warned that you might have to pay more for tax filing software.

A brokerage firm is a financial institution serves as a middleman between investors and the stock market, issuing accounts that investors can deposit money into so the broker can perform the transaction. Most people hear about “discount brokers”, the cheaper alternative to “full-service brokers” that allows investors to handle everything without benefits like a stockbroker giving them advice.

I've listed a handful of brokerage firms that claim $0 account minimum and no commission fees, though you should really be doing your own research. Don't be afraid to switch or transfer your brokerage account(s).


  • This is not financial advice. This is merely an educational and informative article.
  • On an average trading day, stocks typically fluctuate between -5% to 5%. This is normal.
    • When a stock drops to certain negative percentages, it will often be labeled as a dip (-5% to -10%), a correction (-10%), a bear market (-20%), a crash (-50%), or a depression (-80%).
  • All that aside, the most important things that you probably need to know is:
    1. The market runs on hype and speculation. This is why “buy the rumor, sell the news” is such a popular philosophy among traders. Technical analysis is only useful to a certain extent.
    2. Be wary around an earnings report. You may not want to be holding a stock during a correction, but don't exactly jump the gun either if you believe the stock can shoot right back up.
  • Politics can and will affect the stock market, so be skeptical whenever you see politicians rally against international companies (e.g. Meta Platforms paying conservatives to smear its rival TikTok).
    • The communist philosopher Karl Marx did participate in the stock market, specifically on the London Stock Exchange, according to a letter sent to Lion Phillips on June 25, 1864.
  • If you're into bizarre long-term predictions on financial market cycles, you have two options:
    1. Samuel Benner's 54-year cycle from 1875, illustrated by George Tritch. Their original chart actually goes through 2059, predicting “hard times” in 2005, 2012, 2023, 2032, 2039, 2050, etc.
    2. William Delbert Gann's 18.6-year financial time table from 1909. The extended chart requires an adjustment and, if done correctly, predicts major crashes in 2005, 2023, 2042, 2060, etc.
stock_market.txt · Last modified: 2023-09-30 09:22:10 by namelessrumia