• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Cult Of Money

Cult Of Money

Personal finance for the crypto-curious.

  • About
  • Podcast
  • Contact
  • Cryptocurrency
      • How To Start

      • What Is Cryptocurrency And How To Invest?
      • What Is Bitcoin And How Does It Work?
      • What Is Ethereum And How Does It Work?
      • Most Common Crypto And NFT Scams (And How To Avoid Them)
      • Proof Of Work vs. Proof Of Stake vs. Proof Of History
      • How To Invest In Crypto In Your IRA Or 401k
      • Tools + Resources

      • Best Cryptocurrency Exchanges
      • Best Cryptocurrency Wallets
      • Best Crypto Savings Accounts
      • Best Tax Software For Crypto And NFT Traders
      • Reviews

      • Coinbase Review
      • Gemini Review
      • BlockFi Review
      • Binance Review
      • Hodlnaut Review
      • Ledger Wallet Review
  • DeFi
      • How To Start

      • What Is DeFi?
      • What Is Staking Your Crypto?
      • Centralized vs. Decentralized Exchange
      • Tools + Resources

      • What Is Uniswap And How Do Decentralized Exchanges Work?
      • Reviews

  • NFT
      • How To Start

      • What Is An NFT?
      • Tools + Resources

      • Most Popular Play-To-Earn Crypto Games
      • Popular Projects

      • What Are VeeFriends And Are They Worth It?
      • Bored Ape Yacht Club NFTs Are Popular (And Expensive)
      • What Is The Sandbox And How Can You Play?
      • Why Visa Bought A CryptoPunk
  • Investing
      • How To Start

      • Tools + Accounts

      • Reviews

  • Personal Finance
      • Banking

      • Best Bitcoin Rewards Checking Accounts
      • Tools + Resources

      • Tax

      • Income Tax Prep Guide
      • Bookkeeping And Accounting For Crypto And NFTs
Investing

Stock Investing For Dummies [2023 Edition]

By Eric Rosenberg • March 7, 2023

At The Cult of Money, we want to help you navigate your finances. To do this, many or all of the products featured here may be from our partners whom we receive compensation from. This doesn’t influence our evaluations or reviews. Our opinions are our own. Learn more here.Advertiser Disclosure

There are thousands of financial products and services out there, and we believe in helping you understand which is best for you, how it works, and will it actually help you achieve your financial goals. We're proud of our content and guidance, and the information we provide is objective, independent, and free.

But we do have to make money to pay our team and keep this website running! Our partners compensate us. CultOfMoney.com has an advertising relationship with some or all of the offers included on this page, which may impact how, where, and in what order products and services may appear. The Cult of Money does not include all companies or offers available in the marketplace. And our partners can never pay us to guarantee favorable reviews (or even pay for a review of their product to begin with).

For more information and a complete list of our advertising partners, please check out our full Advertising Disclosure. CultOfMoney.com strives to keep its information accurate and up to date. The information in our reviews could be different from what you find when visiting a financial institution, service provider or a specific product's website. All products and services are presented without warranty.

Stock Investing For Dummies

CNBC reports that over 14.6 million Americans had $1 million or more in investable assets in 2021, a substantial increase from the year prior. Crypto gains played a major role in contributing to an increase in American millionaires, alongside a soaring stock market. So how can you become a part of these gains?

Despite being one of the most common investment channels, understanding how the stock market works, determining how to make the best investment, and keeping track of the constant changes in market prices can feel daunting. Read on to learn the basics of stock investing and how to navigate the markets like a seasoned investor.


Table of Contents
What Is The Stock Market?
What Shares Of Stock Represent
How Stock Exchanges Work

Brokerage Accounts And Why You Need Them
Best Brokerages For Investing
Bottom Line

What Is The Stock Market?

The stock market is a platform of exchanges where shares of companies are bought and sold. These exchanges facilitate the transactions of publicly traded companies in a controlled, regulated environment, much like how cryptocurrency exchanges operate. In return for their services, the exchange will earn a fee from the trade participants.  

Although the New York Stock Exchange (NYSE) is the most familiar, several exchanges operate in the U.S., including NASDAQ, American Stock Exchange (AMEX), and others. Many countries around the world have stock exchanges of their own.

The NYSE, located on Wall Street, has been around since 1792. However, it didn’t become a public entity until 2006. A 2007 merger with the largest European stock market, Euronext, led to the NYSE/Euronext becoming an international entity and the world’s largest stock exchange with a valuation of over $26 trillion.

Stock Investing For Dummies: Wall Street

What Shares Of Stock Represent

When someone purchases a share of stock, they have a part-ownership in the company. Despite their ownership, shareholders don’t always have voting rights—the ability to make decisions on company policies. 

There are two main types of stock. The first is common stock, which is most common (pun intended) and allows the owners to vote on company issues and board members. Common stock shareholders are paid last in line after bondholders, creditors, and preferred shareholders in the event of a bankruptcy. Preferred stock doesn’t come with voting rights, but these shareholders typically earn valuable dividends and are prioritized over common shareholders in bankruptcy proceedings.

How Stock Exchanges Work

Stock exchanges act as marketplaces that connect buyers and sellers of securities, like stocks and bonds. These regulated entities ensure that securities are traded efficiently, orderly, and quickly. The markets can process millions of transactions every day. Exchanges either take place in person or electronically. While movies like Wall Street glamorize stock exchanges and trading, the truth is much of the trading excitement doesn’t happen on the exchange floor anymore. 

Auction exchanges, like the NYSE, are physical locations where buyers and sellers can make trades with one another face-to-face. These exchanges used to be the only way to trade securities, but most exchanges today take place electronically. The NYSE is well-known as being one of the last auction exchanges in existence. 

Electronic exchanges are gaining in popularity due to their transaction speed and accessibility. The NASDAQ, founded in 1971, takes claim as the oldest and one of the leading electronic exchanges in the world. 

Brokerage Accounts And Why You Need Them

A brokerage account is an investment account used to buy, sell, or hold securities. Like you would deposit or withdraw money from a checking account, brokerage accounts allow you to transfer money in and out of your account and the stock market. 

Stock brokerage companies like Fidelity, Vanguard, or Charles Schwab provide these accounts and facilitate transactions. You can have multiple accounts, and many come with minimal or no trading fees or account minimums.

Money made from investments is considered capital gains and is therefore taxable by the government. Brokerage accounts are also known as taxable investment accounts. However, many brokerages offer retirement accounts as well, with tax benefits depending on the type of account.

Best Brokerages For Investing

Fidelity: Fidelity features a user-friendly user interface for easy investing for beginner investors. Fidelity also offers customers access to its family of zero expense ratio index funds and a free updated retirement plan with calculators and tools.

Schwab: Schwab offers competitively low fee accounts. Its intelligent portfolio automates investing based on users' goals and is free. It offers tax-loss harvesting and automation. These features make Schwab appealing to the set-and-forget crowd. 

SoFi: SoFi is another competitor in the low fee category. Its automated trading program doesn’t charge any advisory or management fees. The robo advisor feature provides helpful planning resources for real-life scenarios. SoFi also offers a crypto-trading platform, with 30 coins available for trade, including popular currencies like Bitcoin and Ethereum. For those wanting to invest for more than retirement in more ways than one, SoFi has you covered.

Check out this list of the best stock brokerage companies and investing apps.

Bottom Line

You don’t have to be a Wall Street aficionado to invest in stocks. True, stock exchanges can be complex, but nowadays, most are automatic and widely available to the average investor. Features like robo advisors and automatic investing can mitigate risk, accomplish investor goals, and take the busy research work out of investing.

Eric Rosenberg
Eric Rosenberg

Eric Rosenberg is a financial writer, speaker, and consultant based in Ventura, California. He holds an undergraduate finance degree from the University of Colorado and an MBA in finance from the University of Denver. After working as a bank manager and then nearly a decade in corporate finance and accounting, Eric left the corporate world for full-time online self-employment. His work has been featured in online publications including Business Insider, Nerdwallet, Investopedia, The Balance, HuffPo, Investor Junkie, and other fine financial blogs and publications. When away from the computer, he enjoys spending time with his wife and three children, traveling the world, and tinkering with technology. Connect with him and learn more at EricRosenberg.com.

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or other advertiser and have not been reviewed, approved or otherwise endorsed by any of these entities.

Comment Policy: We invite readers to respond with questions or comments. Comments may be held for moderation and are subject to approval. Comments are solely the opinions of their authors’. The responses in the comments below are not provided or commissioned by any advertiser. Responses have not been reviewed, approved or otherwise endorsed by any company. It is not anyone’s responsibility to ensure all posts and/or questions are answered.

Subscribe
Login
Notify of

0 Comments
Inline Feedbacks
View all comments

Primary Sidebar

  • Facebook
  • Instagram
  • Pinterest
  • RSS
  • Twitter
  • YouTube

Editor’s Picks

  • 8 best cryptocurrency exchanges ranked

    8 Best Cryptocurrency Exchanges Ranked For 2023

  • crypto savings accounts

    6 Best Crypto Savings Accounts For 2023

  • Cryptocurrency Bonus Offers

    10 Best Crypto Promotional And Bonus Offers

  • best crypto wallets

    Best Crypto Wallets For 2023 (Software And Hardware Options)

  • Best Portfolio Trackers For Cryptocurrency And Stocks

    6 Best Portfolio Trackers For Cryptocurrency And Stocks

  • best tax software for crypto and NFT traders

    Best Tax Software For Crypto And NFT Traders In 2023

Popular Posts

  • proof of work vs. proof of stake vs. proof of history

    Proof Of Work vs. Proof Of Stake vs. Proof Of History

  • Why I Bought An NFT

    Why I Bought An NFT [And 5 Reasons You Should Too]

  • My Dogecoin Experiment: What I Learned From Investing $2,000 In DOGE

  • common crypto and nft scams

    Most Common Crypto And NFT Scams (And How To Avoid Them)

  • Bookkeeping and Accounting for Crypto and NFTs

    Bookkeeping And Accounting For Crypto And NFTs

  • what is a 51% attack

    What Is A 51% Attack? (And How Is That Game Over For Crypto?)

  • what is staking crypto

    What Is Staking And How Can You Make Money With Your Crypto?

  • what are veefriends

    What Are VeeFriends And Are They Worth It?

  • how to file a complaint against crypto exchanges

    How To File A Complaint Against A Crypto Exchange [Crypto Regulators]

Footer

Pages

  • Best Cryptocurrency Wallets
  • Best Cryptocurrency Exchanges

Categories

  • Cryptocurrency
  • DeFi
  • NFT
  • Personal Finance

About

  • About The Cult Of Money
  • Contact
  • How We Make Money
  • Advertise With Us
  • Facebook
  • Instagram
  • Pinterest
  • RSS
  • Twitter

Copyright © 2023 | Cult of Money | Privacy Policy | Terms of Service

wpDiscuz