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The Three Factor Model of the Stock Market: The Fama-French Three Factor model

Information about the stock market and stocks are everywhere. Unfortunately, it isn’t really easy for the average person to understand. It is best to have a professional handle your stocks if you are going to seriously get involved in buying, trading and selling, but it is also important that you have some basic knowledge of your own.

Stocks are pieces of a companies net worth that you buy. When the companies net worth grows so does the price and worth of your stock and visa versa when the companies net worth decreases. Companies usually sell stocks to gain capital (money). It is a easy, risk free way for them to raise money. When you own stock in a company you own a piece of that company.

Buying stock can be difficult. That is why most people go through a stock broker. There are a few different kind of brokers and their names can give you idea of how much they will charge you : full service brokers, discount brokers, and deep-discount brokers. Some brokers will look at past performance to decide if it is worth buying a companies stock. Other brokers will look at how the company has grown over a period of time. The Securities and Exchange Commission (SEC) makes the rules and governs over the stock market.

Here are three simple tips to help you make the most out of your stock market experience.
- Keep stocks that are making money.
- Dump stocks that are losing money.
- Look for companies with good CEO’s.

Once you decide on your broker and what stock you are going to buy, keep up=to-date on how your stock is doing by watching stock returns on TV or reading them in the paper. Keep alert about your investment and you should do all right.

The Stock Market article was written by Craig Dawber, The infomation found in this website can without doubt can help with starting in the stock market check it out http://stockmarketpages.info.

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