Welcome to the BASIC Module!

This course will cover most of the fundamentals that will enable you to get started into trading with ease and high confidence.

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KEY LESSONS

Introduction to Stockmarket
History of Stock Market in the Phillipines
Types of Securities
Market Value
Stock Investing Strategies
Risk Management
Technical Anaylsis

WHAT YOU’LL LEARN!

Advantages
& Disadvantages

The stock market offers opportunities for investors to grow wealth through capital appreciation, dividends, and portfolio diversification, while also providing liquidity and serving as a barometer of economic health.

Risk & Return

Risk and return are fundamental concepts in investing, where higher potential returns are typically accompanied by higher levels of risk, requiring careful assessment to achieve balanced investment outcomes.

Securities and Exchange Commission (SEC)

The Securities and Exchange Commission (SEC) oversees and regulates the securities industry, promoting transparency, investor protection, and fair markets in the United States.

Market Efficiency

Market Efficiency is Crucial as it ensures fair pricing, facilitates accurate allocation of resources, and fosters investor confidence by re ecting all available information in asset prices swiftly and accurately.

Economic Factors

Economic factors encompass a broad range of influences that shape market conditions, impacting everything from consumer behavior to investment decisions and overall economic growth.

CHAPTER I:
Introduction to Stock Markets

The stock market is one of the most important components of the global financial system. It is a marketplace where shares of publicly traded companies are issued, bought, and sold. These shares represent ownership in a company, and by purchasing them, investors become partial owners of that company. The stock market serves as a platform for companies to raise capital and for investors to grow their wealth. It operates through stock exchanges, which can be physical locations like the New York Stock Exchange (NYSE) or electronic platforms like the NASDAQ.

The stock market plays a critical role in the economy by facilitating the flow of capital from investors to businesses. This capital is used by companies to fund operations, expand production, invest in research and development, and pursue growth opportunities. In turn, this drives economic growth, innovation, and job creation. Additionally, the stock market provides a mechanism for price discovery, where the value of a company is determined by the collective actions of buyers and sellers in the market.

For investors, the stock market offers opportunities to generate returns through capital appreciation (an increase in the value of shares over time) and dividend income (a portion of a company's profits distributed to shareholders). However, investing in the stock market also involves risks, as stock prices can be volatile and influenced by various factors, including economic conditions, corporate performance, and geopolitical events.

Historical Context and Evolution

17th Century - Amsterdam Stock Exchange

The Amsterdam Stock Exchange, established in 1602, is widely regarded as the world's first official stock exchange. It was created by the Dutch East India Company (VOC), which issued shares to the public to raise capital for its trading ventures. This marked the birth of modern stock trading, as it introduced the concept of publicly traded companies and provided a regulated marketplace for investors. The Amsterdam Stock Exchange also pioneered the trading of bonds and derivatives, laying the foundation for modern financial markets.

The London Stock Exchange (LSE) was formally established in 1801, but its origins date back to the late 17th century when traders met in coffeehouses to buy and sell shares. The LSE became a hub for trading government bonds and shares of companies involved in trade and colonization. It played a key role in financing the British Empire's expansion and solidified London's position as a global financial center. The LSE also introduced regulations to ensure transparency and fairness in trading.

18th Century - London Stock Exchange

19th Century - Industrialization and Railroad Boom

The 19th century saw the rapid expansion of stock markets, driven by the Industrial Revolution and the growth of railroads. Companies needed significant capital to fund large-scale infrastructure projects, and the stock market became a primary source of funding. This period also saw the rise of stock exchanges in the United States, such as the New York Stock Exchange (NYSE), which was founded in 1792. The railroad boom in the U.S. and Europe led to increased trading activity and the development of new financial instruments, such as preferred stocks and convertible bonds.

The Wall Street Crash of 1929 marked the beginning of the Great Depression, one of the most devastating financial crises in history. The crash was triggered by excessive speculation, overvalued stocks, and a lack of regulation. It exposed weaknesses in the financial system and led to widespread economic hardship. In response, governments implemented regulatory reforms, such as the creation of the Securities and Exchange Commission (SEC) in the U.S. to oversee stock market activities and prevent fraud.

1929 - Wall Street Crash

1980s - Globalization and Technological Advances

The 1980s witnessed the globalization of financial markets, with increased cross-border investments and the emergence of multinational corporations. Technological advancements, such as electronic trading platforms, revolutionized the stock market by making it more accessible and efficient. The introduction of computerized trading systems reduced transaction costs and increased the speed of trade execution. This period also saw the rise of mutual funds and pension funds, which became major players in the stock market.

The 2008 financial crisis, triggered by the collapse of the housing bubble in the U.S., had a profound impact on global stock markets. It led to widespread losses, the failure of major financial institutions, and a severe economic recession. Governments and central banks around the world implemented unprecedented measures to stabilize the financial system, including bailouts and stimulus packages. The crisis also led to significant regulatory changes, such as the Dodd-Frank Act in the U.S., aimed at preventing future crises.

2008 - Global Financial Crisis

21st Century - Rise of High-Frequency Trading and Fintech

The 21st century has been characterized by the rise of high-frequency trading (HFT), which uses algorithms to execute trades at extremely high speeds. HFT has increased market liquidity but has also raised concerns about market stability and fairness. Additionally, financial technology (fintech) innovations, such as online brokerages and mobile trading apps, have democratized access to the stock market, allowing retail investors to participate more easily. The emergence of blockchain technology and cryptocurrencies has also introduced new possibilities for the future of financial markets.

CHAPTER II:
Factors Under Stock Market

Several key factors influence the stock market, shaping its movements and determining investor sentiment. Economic indicators, such as GDP growth rates, employment, and inflation levels, provide insights into the overall health of the economy and can significantly impact stock prices. Corporate performance, reflected in earnings reports, revenue growth, and pro t margins, directly affects the valuation of individual stocks.

Understanding these factors is essential for investors seeking to navigate the complexities of the stock market and make informed decisions.

Stock Market

The paramount importance in trading, serving as the primary platform where investors can buy and sell shares of publicly traded companies. It facilitates the efficient allocation of capital, enabling businesses to access the funds necessary for expansion, innovation, and operations. For investors, the stock market offers opportunities to grow wealth through capital appreciation, dividends, and portfolio diversi cation.

Equity Market

Also known as the stock market, is crucial in trading for several reasons, playing a pivotal role in the broader financial system and economy. It provides a platform for companies to raise capital by issuing shares to the public, enabling businesses to fund expansion projects, innovate, and improve their operations. This process not only helps companies grow but also drives economic development and job creation.

Trading Market

Trading platforms are essential in the trading world, acting as the interface through which traders and investors engage with nancial markets. They provide Accessibility and Convenience, Real-Time Data and Analysis, Order Execution,Advanced Tools and Features,User-Friendly Interfaces, Security and Regulation, Educational Resources,Social and Copy Trading ,Cost Efficiency.

Why do we need to learn this?

Stock market trading offers the potential for substantial rewards, but it also involves inherent risks. While successful investments can yield significant profits, the value of stocks can fluctuate due to various factors such as economic conditions, market sentiment, and company performance. Understanding and managing these risks is essential for successful investing.

CHAPTER III:
Accounting and Financial Statements

Foundational elements of financial transparency and decision-making for businesses. Accounting involves systematically recording, analyzing, and reporting financial transactions to provide a clear picture of a company's financial health. Financial statements, including the balance sheet, income statement, and cash ow statement, are critical tools in this process.

Together, these documents offer stakeholders, including investors, creditors, and management, essential insights into financial performance and stability, enabling informed decision-making and strategic planning

Basic Investment Decision-Making

Basic decision-making is crucial in trading as it forms the foundation for more complex strategies and ensures sustainable success. At its core, effective decision-making involves evaluating market conditions, understanding risk management, and making informed choices based on data and analysis. This process helps traders minimize losses and maximize profits by avoiding impulsive decisions driven by emotions.

Overall, mastering these fundamental skills is essential for building confidence, improving trading performance, and navigating the often unpredictable nature of financial markets.

Cash Flows and Changes in Equity

Basic investment decision-making is crucial for individuals and organizations alike, as it forms the foundation for prudent nancial management and long-term wealth creation. By carefully evaluating various investment options based on factors such as risk tolerance, nancial goals, and time horizon, investors can tailor their portfolios to suit their specific needs.

Ultimately, sound investment decision-making empowers individuals and organizations to build wealth steadily, achieve financial milestones, and secure their financial future.

Risk Trade Off

Understanding and managing risk trade-offs is essential in making informed decisions across various domains, from investing to business strategy and everyday life. At its core, the concept of risk trade-off involves balancing the potential benefits of an action or investment against its inherent risks. This process requires careful consideration of multiple factors, including financial goals, time horizon, and risk tolerance. In investment contexts, higher potential returns often accompany higher levels of risk. Therefore, investors must weigh the possibility of earning greater profits against the likelihood of experiencing losses.

Understanding risk trade-offs enables individuals and organizations to make informed choices aligned with their objectives, navigate uncertainties effectively, and achieve a balanced approach to risk management in pursuit of their goals.

CHAPTER IV:
Technical Analysis

Used by traders and investors to evaluate and forecast the future price movements of securities based on historical market data, primarily price and volume. Unlike fundamental analysis, which focuses on a company's intrinsic value through financial statements and economic indicators, technical analysis relies on chart patterns, trends, and statistical indicators to identify potential trading opportunities.

This approach requires a keen understanding of market psychology and the ability to interpret complex data visualizations, offering a systematic way to navigate the dynamic nature of financial markets.

The systematic evaluation of market data to forecast future trends and make informed decisions. This approach relies on historical data, such as sales figures, customer behavior patterns, and market conditions, to identify patterns and trends that can influence future marketing strategies. By leveraging tools like statistical analysis, data visualization, and predictive modeling, marketers can gain insights into the effectiveness of past campaigns, customer preferences, and potential market shifts.

This data-driven approach enhances decision-making, enabling companies to stay agile and competitive in a dynamic market environment.

ADVANTAGES & DISAVANTAGES

Data-Driven Insights

Provides objective, quantifiable data that can guide marketing decisions and strategies.

Pattern Recognition

Identifies trends and patterns that can predict future market behaviors and customer actions.

Risk Management

Helps in assessing potential risks and making informed decisions to minimize losses.

Timing

Assists in determining the optimal timing for marketing campaigns and product launches to maximize impact.

Resource Allocation

Enables efficient allocation of marketing resources by identifying the most promising opportunities and areas for investment.

Historical Context

Utilizes historical data to understand past performance, which can inform future strategies and improve forecasting accuracy.

Data Dependency

Relies heavily on the availability and accuracy of historical data, which may not always predict future outcomes.

Complexity

Can be complex and requires expertise in data analysis and interpretation, which might not be readily available in all organizations.

Short-Term Focus

Often focuses on short-term trends, which might overlook long-term market dynamics and strategic opportunities.

Market Volatility

May not account for sudden, unpredictable market changes or external factors that can impact trends.

Resource Allocation

Risk of over fitting models to historical data, leading to inaccurate predictions if future conditions differ significantly from past patterns.

Bias and Noise

Can be in influenced by market noise and biases in the data, potentially leading to misleading conclusions.

Factors Under Stock Market

Day Trading

The practice of executing marketing strategies with a very short-term focus, often responding to daily market changes and consumer behaviors. This approach is akin to day trading in financial markets, where decisions are made quickly to capitalize on immediate opportunities.

Range Trading

Targeting and capitalizing on a specific, stable segment of the market where consumer behavior and demand remain relatively consistent over time. This strategy focuses on identifying and exploiting the "range" or zone within which a target audience's needs, preferences, and purchasing patterns uctuate minimally.

News-Based Trading

Involves leveraging current events, trends, and breaking news to shape and time marketing strategies for maximum impact. This approach requires marketers to stay attuned to the latest developments in their industry, the broader market, and society at large. By aligning marketing campaigns with relevant news stories, companies can tap into the heightened public interest and engagement surrounding these events.

High Frequency Trading

Financial counterpart by focusing on executing marketing activities with exceptional speed and efficiency. This strategy involves leveraging advanced technology and automation to rapidly analyze data, adjust campaigns, and optimize customer interactions in real-time.

Market Phases

Accumulation
Uptrend / markup
Distribution
Downtrend / markdown

Accumulation

Refers to the strategic process where a company focuses on gathering and building resources, customer bases, and market presence. During this phase, businesses invest in extensive market research, brand awareness campaigns, and customer acquisition strategies to establish a strong foundation for future growth.

Uptrend / Markup

Characterized by a period of sustained growth and increasing momentum in market share, sales, and brand recognition. During this phase, the marketing strategies and efforts implemented during the accumulation phase start to bear fruit, leading to a noticeable rise in consumer interest and engagement.

Distribution

This phase involves strategically managing the supply chain, optimizing logistics, and ensuring that the right products reach the right customers at the right time. During this phase, companies often diversify their distribution channels, leveraging both traditional retail and digital platforms to enhance market reach.

Downtrend / Markdown

A period marked by declining sales, reduced market share, and waning customer interest. This phase can result from various factors, such as market saturation, increased competition, or changes in consumer preferences. During a downtrend, companies often face challenges like excess inventory, diminished brand visibility, and shrinking profit margins. To navigate this phase, businesses must adopt a proactive approach, reassessing and adjusting their marketing strategies.

Top Trading Platforms

Yieldstreet

Unlock new investment opportunities with YieldStreet, the platform that empowers you to diversify your portfolio beyond traditional stocks and bonds. YieldStreet offers access to alternative investments typically reserved for institutional investors, such as real estate, art, and legal nance, providing potential for attractive returns. With a user-friendly interface, detailed investment insights, and a commitment to transparency, YieldStreet makes it easy for you to explore and invest in assets that align with your financial goals. Join the YieldStreet community today and take control of your financial future by investing in unique and lucrative opportunities. Discover how YieldStreet can help you build a more resilient and rewarding investment portfolio.

Tradestation

Discover the power of trading with TradeStation, a leading platform designed to elevate your trading experience. Whether you're a novice or an experienced trader, TradeStation offers robust tools, cutting-edge technology, and comprehensive market data to help you make informed decisions. With customizable charts, advanced analytics, and an intuitive interface, you can optimize your strategies and seize market opportunities with condence. Start trading with TradeStation today and take advantage of our educational resources, dedicated support, and competitive pricing to unlock your full trading potential. Join our community of successful traders and see how TradeStation can transform yourinvestment journey.

Robinhood

Step into the world of investing with Robinhood, the innovative platform designed to make trading accessible and straightforward for everyone. With Robinhood, you can buy and sell stocks, ETFs, options, and cryptocurrencies without paying any commissions, all from an easy-to-use app. Whether you're a beginner looking to make your first investment or a seasoned trader seeking a streamlined experience, Robinhood offers powerful tools, real-time data, and educational resources to support your financial journey. Join millions of users who are taking control of their nancial future with Robinhood's intuitive interface and revolutionary approach to trading. Start investing with Robinhood today and discover how effortless and empowering trading can be.

Basic Stock Market Quiz

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INVESTMENT DISCLAIMER

Before making any investment decisions, it is recommended that you consult with a qualied nancial advisor or conduct your own research. The opinions expressed here are those of the authors and do not necessarily reect the views of the platform. Past performance is not indicative of future results.

The information provided on this platform is for educational and informational purposes only and should not be considered as nancial or investment advice. Investing involves risks, including the potential loss of principal. The value of investments and the income derived from them can go down as well as up and investors may not get back the amount originally invested.

We make no representations or warranties, expressed or implied, regarding the accuracy, completeness, or timeliness of the information, and we shall not be liable for any errors or omissions or any damages arising from its use. By using this platform, you acknowledge that you have read, understood, and agreed to this disclaimer.

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