Client Resources


A Guide to Investing and the Stock Market

The stock market isn't exactly a get-rich-quick scheme. In fact, for those who are interested in investing, the best approach is often to wait things out and see how the market goes. Investors devote plenty of time to analyzing the market to ensure that they're getting the best deals, and companies benefit from being able to use the money of these investors to fuel their growth. A company's performance on the stock market can be an indicator of the long-term financial future of the company; investors who feel confident about how the company is run will buy more shares and drive up the share price, but if investors feel that the company is mismanaged or performing badly, the share prices will decrease.

What Is the Stock Market?

The stock market is both a physical and virtual space that allows investors the opportunity to buy and sell shares of company stock. The companies listed on the stock exchange are called publicly traded companies, and their performance is tracked using an index. The index represents the market and is used as an indicator of the overall health of the market.

  • What Are Stocks? Stocks, also known as equities, are a form of security for companies that gives stockholders a chance at partial ownership of these companies.
  • The Social Functions of the Stock Market: Stock markets have a lot of sway over how the economy is doing and a large capacity to generate value.
  • Personal Finance: The Stock Exchange: Understanding what the stock exchange is and how stocks are bought and sold can bring stability, transparency, and efficiency to the trading process as a whole.
  • What Is the Stock Market? This page is designed to educate teens on the stock market, but it also offers easy-to-follow details for investing beginners of any age.

Stock Market Basics

When it comes to trading stock, timing is the most important thing. Current events can have a strong effect on the value of stocks, and stock traders try to anticipate these events so they can buy shares while they're low-priced and sell them when the value rises. Traders make their money by selling their shares for more than what they paid, and they shouldn't mind waiting a while to do so. But some stock traders, called day traders, will buy and sell stocks over the course of a day to make more money. Government officials do their best to set rules for traders to ensure that nobody has an unfair advantage.

  • Stock Market Basics: This page offers a detailed rundown on the basics of stock exchanges, stock indexes, and stock markets for beginners.
  • Stock Trading 101: Learn about the basics of trading stocks with helpful examples to help you get started in investing.
  • The Basics of Investing in Stocks: Get a better understanding of what investing in stocks entails by learning about the types of stocks, the risks and benefits, and what goes into buying and selling stocks.
  • How to Learn the Stock Market Basics: The stock market is a great tool to achieve financial independence and help you retire early. Building a portfolio of long-term investments in the stock market is a great way to do that.
  • The Basics of Investing in Stocks: Stocks may be unpredictable, but for many people, they've delivered huge returns over the years. With the right information, maybe you will become one of those people, too.

What Are Stock Exchanges?

A stock exchange is a centralized location where investors and traders are able to buy and sell their shares. Investors often use a broker who helps them create a diversified portfolio, including shares from multiple different kinds of companies so that they don't put all of their eggs in one basket. The New York Stock Exchange and the Nasdaq are some of the most famous examples of stock exchanges, but there are alternatives as well.

  • New York Stock Exchange: The New York Stock Exchange is the largest securities exchange in the world. Not only is it a platform for other companies' stocks, but it's a publicly traded company in its own right.
  • Nasdaq Composite Index: Take a look at the Nasdaq Composite Index to get an idea of how the market is doing today.
  • What Is a Stock Exchange? The stock exchange is a central hub of activity for the market where people can buy and sell shares from hundreds of publicly traded companies.
  • What Is the Stock Market? The stock market includes multiple stock exchanges where people are free to buy and sell stocks.
  • Wall Street History: The Stock Exchange: The stock exchange in the United States has a long history, and you can read more about it with the Library of Congress.

All About Stocks

Stocks represent partial ownership of a company, but there are multiple different kinds of stocks. Some shares, called founders' shares, are reserved for the creators of the company. Preferred stock is another option that adds an additional level of voting rights for shareholders. Overall, the most commonly traded stocks in the market are common stocks. You might also hear people talk about stocks with bonds, but bonds are something else: They're like shares of a loan, pieces of a company's debt. People who own bonds have no ownership rights in the company, only the right to receive the money they paid plus interest as agreed to in the conditions when the bond was initially purchased.

  • How to Pick Stocks: These guidelines make it easier than ever to decide which stocks to pick before you invest in them.
  • All About Stocks: Learn more about what stocks are and how they're important for investors and companies alike.
  • Stocks, Bonds, and Mutual Funds: Investing can be stressful when you're just starting out, but this simple guide can help you learn about stocks and other types of investments.
  • Stock Investing Cheat Sheet: If you're committed to investing in stocks, there are a few key points you need to keep in mind to make good choices.

A Glossary of Stock Market Terms

Bear Market: When the stock market is in a long period of decline

  • Bear Market: Learn about the intricate nature of a bear market with this article from Georgia State University.

Bull Market: When the prices in the stock market are starting to go up or are predicted to rise in the upcoming weeks

  • What Is a Bull Market? Markets are constantly in flux, and long-term investors are always looking forward to bull markets, but it's important to understand them to potentially see the signs of when one has run its course.

Dividends: A company's profit that is distributed to its shareholders

Initial Public Offering: Also called an IPO, this is the first time a company issues shares in the stock market.

Leverage: A method used by investors to amplify their buying power in the market by borrowing brokerage funds to increase their returns

  • Leverage: Learn about the basics of leverage in a way that's broken down in an easy-to-read format for anybody to understand.

Margin Trading: A trader borrows brokerage money to buy stocks using cash or securities in their account as collateral.

  • What Is Margin Trading? Marin trading is popular with investors who want to amplify their profits, but it also comes with the potential for great losses, and a bad streak of leveraged trades can ruin accounts fast. This page covers what investors need to know about margin trading.

Spread: The price difference between the lowest price per share and the highest bid

  • Spread Definition: Brokers typically use the word "spread" when they quote prices for potential investors.

Additional Information About the Stock Market

  • Stock Market Simulation: This lesson plan requires no prior stock market knowledge and is a great way to teach kids of all ages about the stock market through a simulation.
  • Stock Market for Kids: This simple explanation of the stock market is great for kids, teens, and even adults.
  • Stock Market Savvy: This guide was created by the New York Stock Exchange for middle- and high-school teachers and can be customized to fit the needs of the class.
  • Lesson Plan: Stock Market: The objective of this lesson is to teach students how to identify stocks and bonds as well as about the stock market's role in the economy.
  • Kids' Finance Glossary: This glossary covers some of the key terms kids and teens will need to know when learning about the stock market for the first time.
  • Personal Finance Lesson Plans: How The Market Works has put together a variety of lessons about personal finance and the stock market designed to help kids of all ages learn about the value of money and how to grow their wealth.
  • Invest in Gold With a Self-Directed IRA: Stocks aren't the only thing you can invest in. You can invest in things like precious metals as well to diversify your portfolio.
  • Stock Market Basics: Still struggling to understand the basics of the stock market? This article from the International Monetary Fund can help explain the complexities of financial markets.
  • Stock Market Lesson Plan on Personal Finance: This lesson plan explains the risks and rewards of investing in stocks.
  • What's Up With the Stock Market? This saving and investing exercise asks students to invest a hypothetical $1,000 following certain criteria and track their investments for a month-long period.
  • What You Should Know About the Stock Market: This article explains the stock market in common terms to help people understand how it works.
Corporate Headquarters:
Madison Trust Company
401 East 8th Street • Suite 200
Sioux Falls, SD 57103
Mailing Address:
Madison Administration Company
One Paragon Drive • Suite 275
Montvale, NJ 07645
Monday - Thursday: 9:00AM - 6:00PM EST
Friday: 10:00AM - 4:00PM EST
Saturday/Sunday: Closed
(800) 721-4900
[email protected]
F: 845-947-1212