RAMON P. DEGENNARO – HOW THE STOCK MARKET WORKS

There are many ways to learn about the stock market. Most people can’t afford to learn. Wrong. By making expensive mistakes.

The stock market can be used to own valuable assets of a company and it can also be used to invest in long-term gains. When the economy grows, your wealth grows because you own a well-diversified portfolio of individual stocks or stock funds. Too many investors succumb to the high-risk pursuit of beating the market by trying to pick winners, predict price trends, or otherwise find opportunities that other investors have missed.

Millions of people in all walks of life use retirement plans such as IRAs and 401(k)s to invest in the stock market. What? To purchase. When. It is up to each investor to sell stocks. Understanding exactly what the stock market is and how it works is the best approach.

• Factors of success: Many people focus on increasing their rate of return on stocks, which is hard to do without taking substantial risks. It’s much safer to focus on two other factors that affect how much money you earn.
• No free lunch: You can’t make much money in the stock market if you miss the handful of best trading days of each year, which are unpredictable. But if you stay invested so that you enjoy the good days, you’ll experience some horrible days too—because there’s no free lunch.
• Above all, diversify: Diversification is the closest thing to a free lunch in investing. Just holding three different stocks instead of one decreases portfolio variation by about 40% on average. That’s a significant reduction in risk that doesn’t cost anything in terms of expected returns.

For anyone who is thinking of entering the market. The stock market works. Dr. Ramon P. DeGennaro is an award-winning professor in banking and finance at The University of Tennessee. A congenial and straight-talking expert, Professor DeGennaro leads you through 18 detailed lectures that explain the stock market from the inside, introducing you to the factors that make company stocks rise and fall and the information you need to grasp the market’s role in the world economy.

You will find even if you have owned stocks for a long time. The stock market works. The focus should be on the basics of investing in stocks. If youentrusting the management of your assets to a financial advisor, this course will give you the insights you need to converse knowledgeably with him or her and be an informed participant in your own financial well-being.

Tailor your investments to fit your needs. You.

If you want to invest in the stock market, you need to understand the fundamental difference between bonds and stocks. Both represent claims on the assets of a company, but with different returns, different levels of risk, and a different relationship between you and the company.

Professor DeGennaro explains the key points with simple examples that are memorable and insightful. He uses charts, graphs, and other visual aids that are reproduced in the course guidebook for audio customers.

You cover a lot of topics. The stock market works. Including these:

• How to open a brokerage account and choose a financial advisor
• The essentials of mutual funds, including index funds, and exchange traded funds (ETFs)
• How to trade individual stocks, including how to use options
• The relative advantages of traditional IRAs, Roth IRAs, and 401(k) plans
• How to minimize transaction costs and use tax laws for your benefit
• The dangers of frequent trading and other counterproductive habits
• Financial concepts and terms that allow you to understand business news and communicate more effectively with your broker
• The basics of corporate balance sheets, income statements, and cash flow statements

Slowly, aim to become well off.

The stock market works. It is a fascinating lesson for the average investor. Imagine if you sat at home and watched the price of a stock that interests you. It only takes a quarter of a second for a huge spike to show up on your screen. You wonder, what was that?

Professor DeGennaro says that it was a high-tech computer program that placed and canceled hundreds of buy and sell orders. Some programs exploit small differences in prices to make a lot of money. No one can hope to take advantage of these tiny and fleeting opportunities without access to such technology.

Professor DeGennaro says you shouldn’t be discouraged by the sophisticated techniques available to professionals. Stock prices are close to fair because of their ceaseless competition. It is possible to invest in the market that the price you are paying for most stocks reflects their true worth. Professor DeGennaro talks about the efficient market hypothesis throughout the course.

When you think about investing. Not. As a long-term strategy for increasing your wealth, you are less likely to act on impulse. Professor DeGennaro says that instead of trying to get rich quickly, you should aim to become well off rather slowly and not worry about losing everything.

Professor DeGennaro tells you to get started today. He compares saving and investing to planting a tree. The best day to start was 15 years ago. If you act now, you can do a world of good.

This is not true.

The financial information provided in these lectures is only for informational purposes and not for the purpose of providing financial advice. It is an inherent risk that you will lose part or all of your investment. Before investing, investors must thoroughly research and analyze each and every investment. The consequences of such risk are not limited to: federal/state/municipal tax liabilities, loss of all or part of the investment capital, loss of interest, contract liability to third parties, and other risks. Neither The Teaching Company nor the lecturer is responsible for your use of this educational material or its consequences if you use these lectures. You should seek advice from a financial advisor if you have any specific financial investing questions. The opinions and positions provided in these lectures do not reflect the opinions or positions of The Teaching Company or its affiliates. Any tax advice provided in these lectures may not be used to avoid tax penalties or to promote, market, or recommend any matter therein.

The Teaching Company will not be held responsible for damages or lost profits that result from the use of these lectures. Liability will be limited to the greatest extent allowed by law in states that do not allow some limitations.

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