Everyone sees the numbers that are reported each night on the news. These include the Dow Jones Industrial Average, the NASDAQ Composite Index and the S&P 500. These numbers don’t indicate prices of individual stock. Instead, they give the averages of the different stock markets to help people have a general idea as to how the stocks are doing. For instance, when you see the Dow Jones Industrial Average, this is basically the sum of 30 of the largest American stocks. This number is then divided by the total number of companies and splits involved. The NASDAQ Composite is the average of the stocks that are listed in the NASDAQ exchange, which includes companies around the world. The S&P 500 includes 500 large companies.
The stock averages will help you to determine the health of the stock market, overall. If the economy is on the ups, then stock prices will usually rise. If the economy is going down, then prices of stock will usually fall. A rise in the stock average is known as bull market, while a fall is known as bear market. A bear market is usually when the Dow Jones Industrial declines more than 20 percent.
Investors will have a few different options when it comes to buying and selling their stocks. There are many companies out there that can trade within the stock market. If you want to deal with a stock broker, you can hire someone to make your trades for you.
Another way to make your stock trades is through the use of the internet. With the internet, people can open an online trading account and take care of their own stock buying and selling- in real time.
There are some stocks that are not listed on the exchange. These are referred to as Over the Counter stocks. These stocks are smaller companies, and there is usually a higher risk involved