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el The stock market is not a maze with a mine under every step, but a clear system with precise rules and terms. Understanding these basic categories not only simplifies the start but also allows for strategic thinking. Each term is the foundation for informed decisions. Below is an analysis of the basic concepts that form the architecture of any investment strategy.
### Basic Concepts of the Stock Market
– **Broker** – an intermediary providing access to the market.
– **Securities** – assets granting property rights.
– **Stock Quotes** – current prices on the exchange.
– **Stocks** – ownership in a business.
– **Dividends** – a portion of profits paid to shareholders.
– **Bonds** – debt securities with fixed income.
– **Bond Coupon** – regular debt payments.
– **Ticker** – a unique code for a security.
– **Blue Chips** – stable leading companies.
– **Investment Portfolio** – a set of assets balanced by goals.
### Broker: Guide to the World of Transactions
The stock market for beginners starts with one name – a broker. A financial intermediary providing access to trading, executing transactions, and transmitting orders to the exchange.
Choosing a licensed broker determines the reliability of operations. In Russia, control is carried out by the Central Bank, in the USA – SEC. A brokerage account is required for transactions.
There are traditional brokers with commissions on the market, such as BCS and Finam. There are also commission-free online services – for example, Tinkoff Investments or Robinhood.
### Securities: Building Blocks of the Stock Market
The terms of the stock market cannot be imagined without the main building material – securities. These are assets confirming property rights and obligations.
Main types: stocks, bonds, units of investment funds. Any purchase on the exchange is an investment in a security with a certain yield, risk, and term.
Having securities in a portfolio allows for risk diversification and creates a foundation for long-term capital growth.
### Stock Quotes: Market Pulse
The price at the moment is not just a number but a live indicator of sentiments. Stock quotes reflect the current value of securities on the exchange.
The dynamics of quotes depend on news, reports, and the external background. The daily rise or fall of quotes adjusts the investment portfolio.
Exchanges record quotes in real-time. Sberbank shares are traded on the Moscow Exchange. Their price constantly changes – it all depends on how many buyers and sellers are in the market at the moment.
### Stocks: Ownership in a Business, Not Just Paper
The terms of the stock market always include the concept of stocks. Acquiring shares is not just an investment but a purchase of a part of a company.
Stocks are divided into common – giving voting rights and dividends, and preferred – fixed income without voting rights.
For example, Gazprom shares provide participation in profits and the growth of the company’s value. From 2020 to 2023, the growth of IT sector companies’ shares in the USA averaged over 40%.
### Dividends: Cash Flow Without Selling
Investments in the stock market provide not only capital growth but also passive income. Companies distribute part of the profits among shareholders – dividends.
The size of the payment depends on the issuer’s policy. For example, “Norilsk Nickel” directs up to 60% of profits to dividends.
Forming a stable dividend flow is one of the strategies of long-term investing.
### Bonds: Reverse Loans
Bonds are debt securities. Buying a bond means lending to a company or government with a fixed yield.
The terms of the stock market always touch on these securities as a low-risk instrument. With bonds, an investor receives a coupon that is accrued regularly.
For example, OFZ-26241 (federal loan bonds) provide a yield of 11.3% per annum with a coupon payment every six months. The term of circulation is until 2031.
### Bond Coupon: Regular Income
A bond coupon is a predetermined payment that the issuer pays to the investor. Payment frequency can be quarterly, semi-annually, or annually.
The coupon rate can be fixed or floating. For example, Rosneft’s corporate bond offers a 10.5% annual coupon with payments every 182 days.
The coupon is taken into account when calculating the total yield. Its regularity makes bonds an important element in any investment portfolio.
### Ticker: Short Code
Each security on the exchange has a ticker – a unique alphanumeric code. This is a navigational beacon in the ocean of information.
The terms of the stock market include tickers as a mandatory tool for analysis. Examples: AAPL – Apple, GAZP – Gazprom, SBER – Sberbank.
The ticker quickly finds information, tracks quotes, and executes transactions. On international platforms, the ticker remains a universal access code.
### Blue Chips: Anchors of Stability
“Blue chips” are the largest companies with high capitalization, stable profits, and regular dividends. They are the backbone of any reliable portfolio.
On the Moscow Exchange, blue chips include Sberbank, Gazprom, Lukoil. In the USA – Apple, Microsoft, Johnson & Johnson.
In turbulent conditions, blue chips maintain positions and provide a predictable cash flow.
### Investment Portfolio: System, Not Randomness
Creating an investment portfolio means allocating funds among different assets. It is important to consider goals, investment horizon, and an acceptable level of risk.
The portfolio combines stocks, bonds, funds, sometimes gold and currency. The terms of the stock market always emphasize the importance of diversification.
For example, a portfolio with 60% stocks and 40% bonds in the long term shows stable returns above inflation.
### Conclusion
The terms of the stock market form the framework of investor thinking. Without a clear understanding of the basics, it is impossible to build a strategy, protect capital, or seize opportunities.
Smart investing starts not with buying but with a conscious choice of approach. Basic terminology not only educates but also disciplines. And discipline is the main currency in the stock market.
