“People don’t buy stock; it gets sold to them. Don’t ever forget that.” – Jordan Belfort, “Wolf of Wall Street”
Last week’s events were only another example of how little power the rich truly have as long as regular people are willing to take a stand. Reddit, a social news platform, urged users and ordinary stock investors to pool money into the failing video game store GameStop to counteract Wall Street hedge funds that bet money the shares would fall.
This market upheaval caused major headlines in The New York Times, CNN and it even spurred reactions from politicians like Alexandria Ocasio-Cortez (AOC) and Ted Cruz.
So where do you even begin?
After Reddit’s dramatic occupation on Wall Street, it only shows just how accessible the stock market is. Historically a rich man’s game, the stock market is now open to all player’s and I am here to lay out the guide.
What is the stock market?
The stock market is just the online marketplace for buyers and sellers to trade stocks. It is important to remember when learning about the stock market that stocks and shares are two different things; stock is the broad term used to say that you are invested in a company while a share describes how much ownership you have in said company.
For example, Reddit users that invested in GameStop only bought stock because that implies they are partial owners of the brick-and-mortar store. While shares describe how much money the individual invested and how much ownership they have, as seen when people say “I have 10 shares in GameStop.”
Related: Reddit Investors Take On Wall Street
Where can I find the stock market?
The New York Stock Exchange (NYSE) and news organizations like The New York Times and CNN keep a current online market that lists anything from world markets from cryptocurrency. However, before jumping into Bitcoin, I would advise first learning how to read the market since it constantly changes.
Points versus percentages
Like stocks and shares, do not confuse points and percentages because these are used to show the change in price. As a beginner, I advise only looking at the company’s points for the time being since this represents the share price. One easy way of interpreting points is equating one point to $1. So, if the GameStop share price drops by two points then it decreases by $2.
Percent values show viewers how much the stock has gained or lost relative to the last recorded price. Investopedia outlines how to calculate percentage gain to help determine if this was a good investment. But don’t worry about this for the time being, just tuck this piece of information into your toolbox and whip it out when you feel more confident.
How to invest
One of the easiest ways to buy stocks is through a brokerage, a company that helps someone buy or sell stock. There are plenty of companies that market to beginner investors, but some good beginner brokers include SoFi Active Investing, Webull, Fidelity, and TD Ameritrade.
When signing up for an account, look out for hidden fees. Some websites require investors to make an initial deposit which, as a beginner, is not helpful since you are still learning what to do with that money.
Free stock market resources♬ desparado by rhianna – dali
Keep in mind
The stock market is always in fluctuation. As the entire country witnessed, the market isn’t necessarily a representation of the economy but rather a representation of demand. Looking at current trends and, perhaps, underground Reddit boards will help you on your path to becoming the next Jordan Belfort.