Do You Understand the Basics of the Stock Market?
  • 1
    When you invest your money in the S&P 500, you are guaranteed a 10% return.
  • 2
    A stock is a piece of paper that tracks the performance of a company.
  • 3
    The stock market market and the economy are connected. Generally when one is up, the other follows, and vice versa.
  • 4
    You can only invest in the stock market if you have at least $1,000.
  • 5
    Individual retail investors shouldn't invest in the stock market because they are at an immediate disadvantage vs. Wall Street traders that have insider information.
  • 6
    Stock picking is difficult, but if you put enough research in, you have a good chance of winning it big.
  • 7
    A bond is the financial instrument that an investor receives when they lend money to a company or government.
  • 8
    In the event of a sale, companies must first pay back their bondholders before paying shareholders.
  • 9
    The share price represents the total value of a company once debts are paid off, allocated between all of the shareholders.
  • 10
    If the price of a stock you own increases, you can assume that you've made money so you are free to spend it how you'd like.
  • 11
    Dividends are periodic cash payments companies pay to their shareholders as a 'Thanks for sticking with us'.
  • 12
    The longer you leave your money invested, the more you'll benefit from the explosive growth powers of compounding.
  • 13
    The most responsible type of investing is having a long-term time horizon of 10 or more years.
  • 14
    The stock market and stock price movements are 100% rationale.
  • 15
    Market risk can be reduced through diversification, but there's nothing we can do about company specific risk.