Major Markets Exchanges

• Stocks trade on exchanges like the New York Stock Exchange and the Nasdaq. These are two of hundreds of worldwide stock markets. Each exchange has requirements for the companies that want to be listed. As would be expected, the world's largest economies house many of the largest stock market exchanges. The top 10 exchanges in the world are the NYSE, Nasdaq, TSE, Shanghai, Taiwan, London, Deutsche Borse, BSE, Shexzhen and Korea.
  
  

What is Stock

• An investment in stock represents ownership of a part of a company. That ownership entitles you to a share of the company's future profits. A stock's value is determined by the market of buyers and sellers. When looking at a stock price on a chart you can find at financial websites like Google Finance (see Resources), you can view the historical and current price of a share of the company's stock.
  
  

Investment Strategies

• Two pillars of investment strategy are risk diversification and dollar-cost averaging. Risk diversification means buying stock in different companies involved in different market sectors and who conduct business in varying locations. The idea is to spread your investments around so they are not as vulnerable to market fluctuations. Dollar-cost averaging is a long-term investment strategy that eliminates the problem of market timing. By purchasing a specific dollar amount of stock or mutual funds every month, an investor can limit his or her risk of buying when the stock is overvalued but also take advantage of times when it is undervalued.