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Stock Market: The Basics You Should Know

Generally speaking the Stock Market refers to equities where actually stocks and derivatives are traded. In the U.S.A. we think the Stock Market is New York City. In fact there are major Stock Markets in Hong Kong, Hamburg, London, Paris, Canada, Japan and others that influence one another and impact the world Stock Market.

Any investor wherever located may hold a substantial stake in any given equity no matter where the equity is traded. The Stock Market is a very large private club that anyone can join with the only admission ticket is the price of a single share of stock.

Euronext is a combination of derivatives, currency and equities to name a sample of products. There are other exchanges that include the AMEX. There are listing requirements for each of the exchanges. The Stock Market is basically a place where buyers and seller of a piece of a company come together and in the process the company hopefully raises some cash or other value.

The stock broker

The key to any relationship particularly when it comes to money is choosing someone you can trust. A stock broker is essentially your agent in charge of your money. The main role of a stock broker is to provide the investor with timely good advice on picking the right investment for you and your money.

There are regulations and government entities that regulate stock brokers in every state. There is arbitration remedies for damages you may incur if the stock broker has acted negligently in the handling of your account. These are bottom line safeguards. You want to pick someone who will never place you in that position.

The broker selection points

- A referral from a friend for a stock broker is useful, but not the final word.

- Does the candidate stock broker ask you about your comfort level in investing.

Is the candidate stock broker forthright in telling you of in-house stock portfolios. Many brokerage houses have baskets of stocks they promote under the firms name. How has the firm's stock package done over the past four quarters.