Adult IQ — Investing in Stocks

Understand What You Own • Do Your Research • Know the Risks

Stocks are something many people come across through retirement accounts, investment accounts or simply by hearing about companies and markets in the news.

But buying a stock just because you've heard the company is doing well, someone recommends it or the price is going up isn't the same as understanding the investment.

The Adult IQ Investing in Stocks guide is designed to give you a practical foundation for understanding stocks before putting your money into them. It explains how stocks work, how companies make money, what can cause stock prices to move and what you should consider before making an investment decision.

What You'll Learn

Inside this handbook, you'll learn about:

• What a stock actually represents

• How shareholders can potentially make money

• Why companies issue shares

• Why stock prices move

• Dividends

• Capital gains

• Market capitalization

• Company revenue and earnings

• Basic company financial information

• Valuation

• Volatility

• Risk and potential return

• Diversification

• Investment time horizons

• How to research and compare companies

• What information to look at before investing

• The difference between investing and speculation

• How market downturns can affect your investments

• Building a diversified portfolio

• Investing for longer-term goals

• Reviewing investments over time

• Common investing mistakes

• The risks of chasing popular or "hot" stocks

• Why following market hype can be dangerous

• The importance of understanding fees and costs

• The risks of putting too much money into one company

• Emotional decision-making when prices rise or fall

• When additional professional guidance may be appropriate

What This Book Is Really About

Buying a stock means becoming an investor in a company.

That doesn't mean the company will always grow, the stock price will always rise or that you'll make money.

Companies can perform differently than expected. Markets can fall. Economic conditions can change. Even businesses that appear successful can experience problems that affect their share price.

That's why understanding what you're buying matters.

This handbook isn't about telling you which stocks to buy.

It's about helping you understand the basic information behind a company and its stock so you can ask better questions, do your own research and make decisions based on more than a headline, social media post or someone else's opinion.

Don't Confuse Price With Value

A stock trading at a low price isn't automatically a bargain, and a stock with a high price isn't automatically expensive.

There is a lot more to understanding a company than looking at the number beside its stock symbol.

Revenue, earnings, financial position, business prospects, valuation, competition and broader market conditions can all be relevant when evaluating an investment.

You don't need to become a financial analyst to understand the basics, but learning what some of these numbers mean can help you look at investments more carefully.

When Markets Go Down

One of the hardest parts of investing can be watching the value of your investments fall.

Market downturns are part of investing, but that doesn't mean every investor will react to them in the same way or have the same ability to wait for a potential recovery.

Understanding your time horizon, goals and ability to tolerate losses is important before you invest — not after the market has already fallen.

Build Your Adult IQ

You don't have to know everything about the stock market before you start learning about stocks.

But if you're going to put your money into individual companies, understanding the basics is a good place to start.

Adult IQ — Investing in Stocks gives you practical information to help you understand stocks, research companies, recognize potential risks and make more informed decisions about your money.

The goal isn't to predict which stock will go up next.

It's to understand what you're buying before you buy it.

Financial Disclaimer

This handbook provides general educational information about stocks and investing. It is not financial, investment, tax, legal or accounting advice and does not provide personalized investment recommendations. Investing in stocks involves risk, including possible loss of principal, and past performance does not guarantee future results. Consider your individual circumstances and consult a qualified financial professional where appropriate.