Stock Market

Common stock represents ownership in a company. When you purchase shares in a corporation, you become, in effect, a silent partner (unless, of course, you have the funds to acquire a meaningful percentage of the equity, in which case you can elect yourself to the Board of Directors and enact changes). As such, the value of your investment is directly tied to the operating results of the business over the long-run, just as if you had opened a coffee shop with your best friend, or bought a miniature golf course with your family.

This distinctionseeing common stock as ownership in a business rather than a meaningless symbol on the electronic tickeris one that can give you a very real competitive advantage over other investors. It gives you the freedom to ignore the noise of the market and focus on what really matters. This will help prevent unintelligent actions during the many financial crises you will encounter in your career.

TIP: In the late nineteenth century, stock quotes were transmitted over telegraph lines to ticker machines. As the information was received, the machine would print it on a small strip of paper known as ticker tape. Although computers came to replace ticker machines,