Why Do I Want To Be Part Of The Stock Market and How Does It Work?

“Trading Marijuana Stocks In A Bull Market” — Case Study

The stock market can offer incredible opportunities to own pieces of very successful companies. Warren Buffett, one of the most famous investors of our time, makes his strategy on buying shares in a company based on the strength of the company as well as putting himself in the shoes of its owner; “Would I want to own and run this company?” For the purposes of these chapters, we will be focused mostly on trading and not so much on actual investing for years or decades.

Though it is very high paced, you can leverage smaller amounts of capital in order to turn that into something much larger. In many cases, stocks priced at lower values can have potential to rise 20, 50, or even more than 100% in the matter of days and can allow average Joe’s with a bit of market knowledge to become more financially independent. With advancements in today’s technology, full or even part time day traders can work from the comfort of their own homes while enjoying the benefits of the stock market.

Whether it’s earning a little extra “dinner money” or making the choice to fire your boss and work full time, the stock market can offer opportunities to allow the 99% to have a shot of becoming part of the 1% and anyone in the 1% to become some of the highest earners in the world. Case and point, Warren Buffett made a choice to take advantage of the stock market at a very early age and now he is one of the 3 richest people in the entire world with a net worth of over $62 Billion!

How It Works

Think of it like an auction. In the equity market, investors bid for stocks by offering a certain price, and sellers ask for a specific price. When these two prices match, a sale occurs. Many times there are several investors bidding at the same price for the same stock. When this occurs, the first investor to place the bid is the first to get the stock. Instead of bidding and waiting for a seller to match your price, a buyer can choose to pay any price for the stock, also considered to be buying at the market value; similarly, when a seller will take any price for the stock, he or she is selling at market value.

Companies sell stocks in order to obtain capital and grow their businesses. When a company offers stock on the market, it means the company is publicly traded and each stock is considered to be a piece of ownership in that company. This appeals to investors, and when a company does well, its investors are rewarded as the value of their stock rises.

Case Study: Trading Marijuana Stocks In A Bull Market

What Are The Risks?

The risk comes when a company is not doing well, and its stock value may fall. Stocks can be bought and sold easily and quickly, and the activity surrounding a certain stock impacts its value. For example, when there is high demand to invest in the company, the price of the stock tends to rise, and when many investors want to sell their stocks, the value could end up going down.

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No matter the case, it’s important to note that emotions should play a very little part (if any at all) when making a decision to buy or sell a stock. Not getting intimidated and having a real plan of action before going into any trade is one of the best ways to be prepared. Furthermore, it never hurts to ask someone more experienced or someone who is actually licensed to offer investment advice. Many top traders and investors usually have others that they may bounce trading ideas off of before making a decision to enter the market.

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