102-00 – Course 102 – Stock Market Investing

Introduction to the course

In this in-depth course, we take a deep look into the stock market as an investment option.  How to trade in the stock market, how to find good stocks, and how to place your trades are all covered.

Specifically, we cover:

• The world’s stock markets, which markets are growing the fastest and also how they move together
• Boom and bust cycles, why do they occur
• How to build a successful stock market strategy
• How to trade the news

In the second section, we look at the fundamentals of stock analysis, including:

• Rating agencies
• The balance sheet, the income statement and the cash flow statement
• Earnings and the P/E ratio.

In the third section, we look at:

• How the markets move
• Portfolio management and other stock market concepts.

In the final section we should you how to practically manage your money:

• Trading terminology and how to place a trade.
• Trading strategies and some golden rules for successful trading.

Finally, we tackle the topics of using leverage, short selling, and introduce you to the topic of technical analysis.

This is a thorough guide to help you understand most of the important aspects of investing in securities and equities in the stock market.

Before You Start Try Our Course Quiz

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The top 2 stock exchanges account for over X of the capitalization of the global markets?

99%

50%

70%

20%

Correct! Wrong!

The two largest stock exchanges in the world are?

Eronext Europe & Shanghai

New York Stock Exchange NYSE & NASDAQ

Correct! Wrong!

The total value of the global stock markets is approximately?

$500 Billion

$500 Trillion

$100 Trillion

$5 Trillion

Correct! Wrong!

What do the global stock markets have in common?

In general they move in the same direction

They are all owned by the domestic governments

Correct! Wrong!

Boom and bust – name some of the most famous stock market crashes?

1929 Crash & Depression & 1987 Black Monday

1935 pre war crisis & Red Friday Collapse 2010

Correct! Wrong!

What is the safest way to try to avoid a stock market crash?

Buying bonds, liquidate early and move to cash

Invest in emerging markets and hide your money under the bed

Correct! Wrong!

Can you name some of the most popular stock market cycles?

The yearly seasonal cycle & The 4 year business cycle

The Penny Stock Cycle & The Bi-Cycle

Correct! Wrong!

What things should you know before you invest in the stock market?

Understand what your profit targets are

Understand fundamental analysis

Know what time frame you want to invest in

Create a system to trade with

Understand Technical Analysis

All of the above

Correct! Wrong!

Is news important to the stock market?

Yes - Macroeconomic news can affect the way investors perceive the outlook and performance of the stock market

No - Ignoring the news prevents bias

Correct! Wrong!

Fundamental Analysis is the study of what?

Stock Charts

Bonds & Treasuries

Company financial accounts and valuations

Concrete and underground structures

Correct! Wrong!

The 3 most important accounting documents are the…?

Invoice listing, Earnings Per Share, Gross Operating EBITDA

Income Statement, Balance Sheet, Cash Flow Statement

Correct! Wrong!

Select the correct statements. Book value is?

The total sum of the profits in the income statement

The worth of a company if all assets were sold and all debts paid off.

Correct! Wrong!

EPS is calculated by?

Dividing the losses by the assets

Adding all taxable investments together and dividing by the liabilities

Dividing the company earnings by the number of outstanding shares in circulation

Dividing the companies assets by its debts

Correct! Wrong!

The PE Ratio…?

Is a way for you to simply compare companies in the same industry and see which ones are trading at a discount.

Refers to the way the profits are divided by the earnings

Correct! Wrong!

Why might some stocks only have a stock price of a few cents?

Bad management

Failure to adapt to changing market conditions

A shrinking market

Uncompetitive products

Bad financial management

Any or All of the above

Correct! Wrong!

A huge surge in the volume of shares traded can indicate?

A change in the supply and demand characteristics for a stock or index

Stock prices will remain stagnant

Correct! Wrong!

Charles Dow suggested that…?

The market discounts everything + The market has 3 trends, primary, secondary and minor + The averages must confirm

The Dow Jones Industrial Average is the best benchmark of market health + The market discounts nothing

Correct! Wrong!

How many stocks should you own?

No more than 20

Less than 5

It depends on portfolio size and the time you can dedicate to investing

Correct! Wrong!

Day traders typically hold a stock for?

A whole day

Weeks

Less than a day

Correct! Wrong!

Risk management is important because…?

The complete removal of risk is good for your portfolio

Risk management is not important

Understanding risk versus reward enables you to make better judgments

The more risk you have the more reward you may get

Correct! Wrong!

Select only the FALSE statement – In stock price terminology…?

The spread is how thinly spread the stock is among many investors

Opening price today can be different from the close price yesterday

Price Change is the percentage change today versus the close price yesterday

When you sell a stock your guidance is the BID price

Correct! Wrong!

Why would a stock be split?

Because part of the company has been spun off

Because too many people want to buy the stock

Because the stock price is too large to be bought easily in round lots

Correct! Wrong!

Name a valid stock investment strategy.

Slide Trading

Buying in the hole

Value investing

Correct! Wrong!

CANSLIM Investing Strategy stand for what?

Currency, Assets, Negligible Sales, Liabilities, Income, Management

It is a positive way to lose weight

A positive mental attitude towards investing

Current Assets, Attainable Assets, New Leads, Sales, Leading Asset Base, Innovation, Market

Current Earnings, Annual Earnings, New Products, Supply, Leaders, Institutions, Market

Correct! Wrong!

Course 102 - Stock Market Investing Quiz

Top Marks - Well Done - You ROCK

You scored a near perfect result in our Stock Market Investing Test. You understand different strategies, trading styles and the importance of Fundamental & Technical Analysis of the Stock Market. To move ahead with learning, you can try our short Course 103 - Technical Analysis or GET SERIOUS & Fast Track your way to Professional Level Knowledge with the Liberated Stock Trader PRO Training.

Still Room for Improvement

Still some work to do. You need to understand the the key terminologies, strategies and investment styles, so you have the structure in your monds to move ahead with more detailed fundamental analysis, technical analysis and portfolio and risk management Try going through the answers you gave above and try to retake the relevant chapters of this training. Also you could Try Our Trading Plan Training Alternatively, book your place on the Liberated Stock Trader PRO Training - the 16 hours of Video lessons will definitely help you move ahead faster.

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