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Lesson 1. Confronting Your Fear of Stock... > Insufficient Financial Knowledge - Pg. 3

Confronting Your Fear of Stocks 3 Insufficient Financial Knowledge Not understanding the workings of financial markets, such as the stock market, is comparable to not understanding financial terms, but the potential for getting into trouble is much greater. A lack of knowledge when you invest in the stock market can get you financially wiped out. Here are two tips for obtaining the knowledge needed to be a successful investor: 1. Up to now you have probably had little or no reason to learn about the workings of the stock market. Until the time I decided to take sky diving lessons, I couldn't have told you at what altitude the cord must be pulled. Before I took my first plunge, however, I assure you I was very sure of when I was supposed to pull my chute. In much the same fashion, you should learn everything you can before taking the investment plunge. As with the technical terms, you only have to learn the workings of those investments that pertain to you. Tip 2. If you feel intimidated by financial information, the best way to deal with it is to casually scan through the financial media. Pick up a copy of The Wall Street Journal or watch Money- line on TV. You'll be surprised to discover that you understand a lot more than you thought you would. This book is designed to explain the internal processes of the stock market that are relevant to you the investor. It will not overwhelm you with extraneous information but instead will give you the essential information you need to know to get started as an investor. Over the years I have learned such informational tidbits regarding the workings of the stock market as how stocks are coded into various classes, how trades are settled, and how to recognize the various functions of the floor traders from the colors of their coats. All of this is certainly interesting and often fun information;