In Review
After shoveling through piles of information and taking in so much knowledge, you probably feel like you are swimming in terminology and cannot remember just where to begin. The best way to retain knowledge is through repetition, and having a quick reference guide is never a bad idea, either. The following pages are a brief overview of the in depth discussions in this book, allowing you to quickly reference a topic in a bind.
The Basic Trade
A share is a holding of a company that varies in value based on the desire or need for that particular company’s goods or services. As a shareholder, your net worth increases and decreases based on taking a short position (selling) when values are high and a long position (buying) when prices are low. As long as the stock or security is in your possession, the change in value is considered unrealized gain or loss because you cannot measure it in liquid assets (cash).
When most commodities traded on the market are on a strong upward trend for a period of time, this is referred to as a bull market. Should value take a sharp downward swing and continue on that path, it is called a bear market. If no such trend is recognized, and the value of stocks and securities is fairly even, this is referred to as flat.
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