Basic Education

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Investor Junction

Join us and start early in life to learn money management.

We will teach you our view of investing in the stock market, learning kids stock education, learning money management and have you experience the magic and power of compounding.

We will welcome sharing and debating of ideas on our "Forum/Calendar” page.

Stocks are like pieces of a company that you can buy. Imagine you have a favorite toy store, and they let you buy a small piece of the store. If the store does really well and sells lots of toys, your piece becomes more valuable and you might get some money. But if the store doesn't sell many toys and doesn't make much money, your piece might be worth less. That's why it's smart to learn about the stocks before you decide to buy a piece of one.

A mutual fund is a combination of stocks/securities, it trades only once a day after market close.

Exchange traded Fund (ETF) is also a combination of stocks/securities, like the Mutual Fund. However, it can be traded or bought and sold on the market like an individual stock during stock market hours throughout the day.

Bonds

There are different types of bonds, which are a way for people to invest their money. Bonds used to not be very popular because they didn't pay much interest. But now that interest rates are higher, more people are interested in bonds as a way to invest their money. Here are three common types:

1. **Corporate Bond**: When a company needs money to grow or pay for things, it borrows money from people who want to invest. In return, the company promises to pay those investors interest regularly.

2. **Treasury Bond**: This is like a corporate bond, but it's safer because it's issued by the government. The government uses the money for things it needs to do, like building roads or schools. You have to pay federal income tax on the interest you earn, but you don't have to pay state or local taxes.

3. **Municipal Bonds**: These are issued by local governments, like cities or counties. They're usually not taxed by the federal government or the state government, so they can be a good way to invest money and earn interest.

However, since our forum is primarily for the younger population who have time on their side, we will be dealing with stocks which are considered a riskier and volatile product but with potential for better growth and compounding of your principal.

A brokerage account is like a special place at a bank where you can put your money to buy things like pieces of companies (stocks), loans to companies or the government (bonds), groups of investments (mutual funds), or collections of stocks (ETFs).

Meme Stocks 

A meme stock is a company's shares that suddenly become really popular on social media, like Reddit. People start talking about them a lot, sharing memes and posts online. The price of these stocks can go up a lot because regular people, not big companies, are buying them. This can make the price go up and down a lot, which is called volatility. Some people make money from meme stocks, but they are risky because their prices can change a lot and quickly. Before investing in meme stocks, it's smart to learn a lot about them and think about how much risk you can handle.

Passive Investing

Passive investing is a way to grow your money over a long time by making fewer changes to what you invest in. Instead of buying and selling a lot, you choose things like ETFs or index funds and hold onto them for a while. These funds copy how well a certain part of the stock market does. The good parts of passive investing are that it usually costs less, you might pay less in taxes, and you don't have to worry about doing worse than the market. But since you're following the market, you might not make as much money as someone who tries to pick the best investments all the time. It's a way to grow your savings by being patient and staying with a mix of different investments for a long time.

Active Management

Active management means that someone is actively trying to pick the best investments to make more money than the average. Instead of just following how the stock market does overall, like in index funds, an active manager studies and predicts which investments might do better. They use their own knowledge and research to decide when to buy, keep, or sell stocks. This kind of investing can be more expensive because of fees for the manager and for buying and selling stocks often. Sometimes, though, the manager's choices might not always work out, which is a risk. Active management is different from passive investing, where you try to match how the stock market does without trying to pick the best stocks.

The following sections are different stock exchanges. To buy a stock, you have to buy it through a brokerage firm such as Fidelity. You cannot go to a store and ask to buy a stock; it does not work that way.

NYSE

The New York Stock Exchange (NYSE), also called "The Big Board," is a place in New York City where people buy and sell pieces of companies, called stocks. It's the biggest stock exchange in the world because it has the most valuable stocks listed there.

The NYSE has been around since 1792. When stocks are traded there, brokers try to get the highest price they can for them, either in a big room where people shout bids or on computers.

The NYSE is now owned by a company called Intercontinental Exchange, Inc. (ICE). It opens for trading every weekday from 9:30 in the morning to 4:00 in the afternoon, Eastern Time. They ring a bell to start and end the trading day.

As of the middle of 2022, the total value of all the companies listed on the NYSE was about $24.6 trillion. This makes it a very important place in the world where people invest and trade stocks.

NASDAQ

The NASDAQ (National Association of Securities Dealers Automated Quotations) is a stock exchange in New York City that started in 1971. It’s different from other stock markets because it uses computers to trade stocks instead of people on a trading floor.

NASDAQ has become famous for listing big technology companies like Apple and Microsoft. As of early 2024, it had over 4,000 companies listed, and together they were worth about $23.414 trillion.

The term “NASDAQ” also refers to the NASDAQ Composite, which is a big list of more than 2,500 stocks from the NASDAQ exchange. This list includes major technology companies like Apple, Microsoft, Alphabet (which owns Google), Meta Platforms (which owns Facebook), Amazon, and Tesla.

Even though NASDAQ is known for technology stocks, it also trades stocks from healthcare, financial, entertainment, retail, and food companies. It's a place where lots of different kinds of businesses trade their stocks to investors.

The S&P 500

The S&P 500, also known as the Standard & Poor's 500 Index, keeps track of how well 500 big companies in the U.S. are doing in the stock market. It started in 1957 by a company called Standard and Poor's. Here are some important things to know about it:

- It looks at companies based on how much their shares are worth and how many shares are available for people to buy.

- The S&P 500 gives more importance to companies that are worth more in the stock market. This helps show how big companies are doing compared to smaller ones.

- The S&P 500 is part of a group of indices that also watch how smaller companies are doing, like the S&P MidCap 400 and S&P SmallCap 600.

- You can't directly invest in the S&P 500 itself, but you can invest in funds that try to copy how it's doing. These funds track the companies in the index and try to do as well as they do.

So, the S&P 500 helps us see which big companies in America are doing well in the stock market, and it's a tool for investors to decide where to put their money.

GLOSSARY

Compounding: Compounding is like magic that happens when you invest your money for a long time. Here’s how it works: When you invest, your money grows not only from what you put in but also from the interest or profit it earns. Over time, that interest or profit also earns more interest or profit. The longer you keep your money invested, the more it can grow because of compounding.

Interest: Interest is extra money you earn on your savings or have to pay when you borrow money. When you save money in a bank or invest it, the bank or company may give you extra money called interest as a thank-you for using your money. But if you borrow money, like for a house or using a credit card, you might have to pay extra money called interest charges. The amount of interest can be different depending on whether you are earning it or paying it.

Securities: Securities are different kinds of money things you can invest in, like stocks (which are riskier), ETFs, mutual funds, and bonds (which are less risky). When you invest in securities, you're putting your money into these different types of investments to try to make more money over time.

Principal: Principal is the money you start with when you invest in something. It’s the amount of money you put in at the beginning. Your goal as an investor is to make this amount of money grow by earning more money from your investments over time.

Income Tax: Income tax is money that the government takes from the money you earn from your job or other ways you make money. This money helps pay for things like schools, roads, and police officers in your community. The amount of tax you pay depends on how much money you earn. It's important to pay your income taxes on time to help support your community and follow the rules.

Forum: A forum is a place where people can talk and share ideas with each other. It's like a big chat room where you can discuss things you care about or ask questions to learn from others.

Volatile: Volatile means something changes very quickly. Imagine a roller coaster that goes up and down fast—it’s like that! In investing, if something is volatile, its value can go up and down a lot in a short time.

Firm: A firm is another word for a company. It's a business that sells goods or services.

Funds: Funds are just money set aside for a specific purpose. People have different funds for different things, like saving for college or for fun things like toys or trips. It’s important to have funds so you can have enough money for what you need or want.

Brokerage Account: A brokerage account is a special place where you can buy and sell things like stocks, bonds, ETFs, and mutual funds. It's set up with a bank or a company that helps you invest your money. You can put money into this account and use it to buy investments you think will make more money in the future. It helps you manage and trade your investments to grow your money over time.