Some Basic Ideas¶

Stock or Share is a unit of ownership in a company. When you invest in the stock market, (stock market is basically a place for buying or selling stocks) there are 2 main ways of earning:

Dividend - This is an amount paid to you by a company for your investment.

- This is an amount paid to you by a company for your investment. Stock Trading - The profit that you make for buying/selling stocks.

- The profit that you make for buying/selling stocks. Portfolio - A combination of assets of an individual / investor.

Fundamentally, you can earn money by buying some stocks, in the hope that it's price will increase in the future.

There are actually clever ways on how to earn even if you predict that a stock price will decline, but that's outside the scope of this lecture.

So in this lecture, we'll oversimplify and what we want is to buy a stock cheap, and sell it when it's price have increased because that way we will make a profit. Otherwise we will incur a loss, if we decided to stell a stock at a cheaper price.