It would help if you increased your stock market vocabulary because it can help to increase the profits you make in your stock market dealings. “How?” I hear you ask. Well, the simple fact is that any investor with a good stock market vocabulary is someone who has a good grasp of all the various options open to them in the market.
By understanding the jargon of stock and shares, you will feel more knowledgeable. And with greater knowledge of the marketplace, you, like any other investor, will have greater confidence in your investment decision-making. Having increased confidence in any activity naturally leads to better overall performance.
Let us look at an example of how an increased stock market vocabulary can help you gain greater confidence. Say, for example, you didn’t understand the language of traded options. Do you think you would feel safe and confident investing in them? It’s not very likely that you would. If you couldn’t understand the difference between a put and a call, you would be foolhardy if you placed your hard-earned money into an investment using them.
So how can you increase your investment vocabulary? In the same way, you would increase your vocabulary in any other field by studying it; it just takes patience and commitment. You could get started by buying yourself a specialist stock market dictionary and looking up any word, or phrase you come across that doesn’t make sense. For an inexpensive dictionary on common stock market terms, you can get one at https://amzn.to/3biuStM.
Nowadays, there is a new style of stock market dictionary that, instead of listing words alphabetically, lists entries in related groups, which makes understanding the jargon much easier. For example, suppose you are new to using technical analysis in your decision-making process. In that case, you could turn to that section to discover the meaning of any phrases you don’t recognize. And with such gems as long-legged Doji, “rickshaw man,” hammers, and gravestones just in candlestick charts alone, you could probably do with all the help you can get!
A quick word of caution here, if you decide to increase your vocabulary by reading up on different terms online, make certain to cross-reference your sources. That way, you can ensure that the definition you find is correct. For a reliable online source of terms and examples, visit https://www.investopedia.com/.
You will benefit from increasing your stock market vocabulary whichever way you choose.
For more information on how to get a solid start in investing, visit our previous post HERE.
If you have any questions or concerns, contact me directly if you are in or near the Metro-Nashville area. For those outside middle Tennessee, seek a qualified fee-only Registered Financial Consultant (RFC) near you.
