TTC Video How The Stock Market Works

You can learn about the stock market in many ways. But most people cannot afford to learn the wrong way-by making expensive mistakes.
Today, millions of people in all walks of life are invested in the stock market through brokerage accounts and retirement plans such as IRAs and 401(k)s. What to buy and when to sell stocks are up to each investor, who often feels besieged by conflicting advice. The wisest approach is to understand exactly what the stock market is and how it works, appreciating such basic facts as these:

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.
For anyone who owns stocks or is thinking of entering the market, How the Stock Market Works provides indispensable advice from Dr. Ramon P. DeGennaro, an award-winning professor in banking and finance at The University of Tennessee, Knoxville. 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, evaluate the relative soundness of stocks, and understand the stock investment options available to you.

Tailor Your Investments to Fit You

The many topics you cover in How the Stock Market Works include 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
Aim to Become Well Off-Slowly

That, says Professor DeGennaro, was a high-tech computer algorithm automatically placing and canceling dozens and even hundreds of buy and sell orders. Some algorithms exploit tiny differences in prices, multiplying a profit of a fraction of a cent many times over. No one without access to such technology can hope to take advantage of these tiny and fleeting opportunities.
When you view investing not as a contest against quick-acting competitors, but as a long-term strategy for increasing your wealth, you are much less likely to act on impulse. “Instead of trying to get rich quickly,” counsels Professor DeGennaro, “you should aim to become comfortably well off rather slowly and without having to stay up all night worrying about losing everything.”
Disclaimer:

The Teaching Company expressly DISCLAIMS LIABILITY for any DIRECT, INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES OR LOST PROFITS that result directly or indirectly from the use of these lectures. In states that do not allow some or all of the above limitations of liability, liability shall be limited to the greatest extent allowed by law.

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