Stock Investing For Dummies®, 3rd Edition

Chapter 1. Welcome to the World of Stock Investing

In This Chapter

• Knowing the essentials

• Doing your own research

• Recognizing winners

• Exploring investment strategies

Stock investing was the hot thing during the late 1990s — a trend just like the hula hoop and pet rocks. With the new millennium, however, a reversal of fortunes has occurred as the bear market of 2000–2002 rocked our world (a bear market is a prolonged period of falling prices — in this case, stock prices). This decade has been a wild roller coaster ride that saw the market hit new highs in 2007, although it's down in ugly fashion in 2008. During this time, the public figured out that stock investing isn't for wild-eyed amateurs or dart-throwers (or the worst . . . wild-eyed amateur dart-throwers!).

I wrote much of this 3rd Edition with current events and market conditions on my radar screen. The year 2008 witnessed some ominous events that will make stock investing very interesting (to say the least) for the time being. Don't let that scare you, though; informed investors have made money in all sorts of markets — good, bad, and even ugly. As I write this, the conditions are in place for an inflationary depression, but selecting stocks that can benefit from these challenging times could indeed make you much wealthier.

The purpose of this book is not only to tell you about the basics of stock investing but also to let you in on some solid strategies that can help you profit from the stock market. Before you invest your first ...