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Stock market is very complex. Some of us just use it as a bet ”Ladies and gentlemen, place your bets! Randomly choose a stock based on instinct! If the price of your stock goes up — and who knows why? — you win! If it drops, you lose!” Theoretically, the stock market is a public market for the trading of stock and derivatives at an agreed price.

The stock market can be intimidating, but if you understand it, you’ll get addicted. Before going to buy stock (or going through the essential explanations) you should keep in mind the following definitions.

A share of stock is literally a share in the ownership of a company. When you buy a share of stock, you’re entitled to a small fraction of the assets and earnings of that company. Assets include everything the company owns (buildings, equipment, trademarks), and earnings are all of the money the company brings in from selling its products and services.

Why would a company want to share its assets and/or earnings with the general public? Because it needs the money!

Who is the person you should contact if you can’t deal with stock market? a broker (A broker is an individual/firm that investors use to execute trades. All investors need a broker to buy and sell stocks).

There are a few strategies used on stock market for a very long time. I’ll present one of them and suggest a few good books to find out a lot more about such methods of trading.

“Trending Value” — is the best performing strategy since 1963. Its annualized return of 20.58% through Sept. 30 crushes the All Stocks benchmark (an equally weighted benchmark of stocks with an inflation adjusted market cap great than $200 million), which has a return of 10.71%.The strategy makes use of one of the main innovations: the use of a composite value factor. By spreading your bets and ensuring that a stock is cheap in a variety of ways, we believe we can identify better stocks. One version of the composite value factor combines the following measures of value:

• Price-to-Sales

• Price-to-Earnings

• Price-to-Book

• Price-to-Cash Flow

• EBITDA/Enterprise Value

Each stock in the universe gets a score of 1 to 100 for each of these factors. The final value score is an average of these scores. The Trending Value portfolio narrows the investable universe to the 10% of stocks with the best score based on the value composite, and then selects a concentrated portfolio of 25 stocks based on trailing six-month momentum.

The books I suggest when it comes to stock market strategies are: “The Logical Trader” by Mark B. Fisher and “Stan Weinstein’s secrets for Profiting in Bull and Bear Markets” by Stan Weistein.

Buying stock can become tiring, consumes all of your time, it makes you open your mind somehow as you have to keep very well informed in order to buy/sell or hold. Time, dedication and information are the keys to become an excellent broker! Let’s try not to forget about the stress level resistance!