The very thought of trading or investing in the stock market scares many people. While it’s natural to be wary of the stock market, it’s important to realize that having a diversified investment portfolio is the key to developing great wealth. And, we’re here to tell you that you don’t need to be an expert to start investing in stocks. If you’re a stock market beginner, here are a few frequently asked questions that we’ve answered to help you build your financial knowledge.
How Does the U.S. Stock Market Actually Work?
It’s important to keep in mind that the stock market does not function like a grocery store. In order to purchase and sell stocks, you need to sign up for an investment account from a licensed brokerage. Once that’s done, you can either purchase stocks through an IPO or trade listed stocks.
When Does the U.S. Stock Market Open and Close Every Day?
This may seem like a rather basic question, but the answer is extremely important and not as straightforward as you may think. The normal trading hours for the U.S. stock market, including Nasdaq and the New York Stock Exchange, are from 9:30 am till 4 pm (Eastern time). The stock market is open during these hours on all weekdays, except on holidays. But trading can also occur outside of the regular hours – this is called pre-market trading. Although the hours can vary, trading can start as early as 4 am. While the stock market usually closes at 4 pm, it may close earlier on early-closure days. However, people can also trade during after-hour sessions, which typically range between 4 pm till 8 pm Eastern time. Keep in mind that the American stock market is closed on weekends – only cryptocurrencies can be traded 24/7.
What Are a Few Things You Should Think of Before You Start Investing?
Now that you know the basics of how the stock market works, you are ready to start making your investments. But, before you do this, it’s important that you understand what kind of an investor you are, what brokerage account would work well for your goals, how much money you want to set aside for your investments, whether you want to invest for the short-term or long-term, and how you intend to manage your portfolio. Once you have your answers to these questions, you can start researching stocks and investing in the ones that seem financially sound.
