First, what are stocks? 

Stocks are instruments that generate interest-bearing payments (dividends) to investors. So basically, when you buy a stock, you buy a percentage of ownership in a business. Let’s say if you own a property for years you can be sure that you will be able to sell it for more money than you bought it for. It works the same with stocks. They are appreciated for a long run. 

When buying stocks, you buy ownership in a business, and you are aware that you are not the only owner and there are other shareholders. These people believe that the company will be successful and will be rewarded for their investment with dividends and capital gains.

The value of a stock can go up and down. Stock’s value basically represents company’s value. There are many different factors that affect company’s stock price and the most important one is the company’s earnings. 

How to invest in stocks

There is actually nothing difficult in buying a stock. First, you'll need some capital, a payment account, and a payment method you can use. Second, you'll need a broker. Brokers are the middlemen between you and the big companies that create and sell stocks.  

Many online brokers allow you to buy stock without paying a penny upfront. All you need is a form of payment and a few minutes to sign up and open an account. All you really have to do is choose a broker that offers you the most competitive commissions, and helpful customer support.

What stocks to invest in 

The buying part is pretty simple to understand, but then the question is what stocks to invest in.  And there might be a difficulty in picking the right one. The stock market consists of a large number of different types of companies with varying share prices, but as a general rule, all stocks are considered "equities." All of them are considered public companies and their financials are open for everyone to see. The stocks on the NYSE are usually followed by a ticker symbol, while smaller companies' stocks are often abbreviated as CCC, LP, and OTC. 

There are over 40 different asset classes that stocks can be classified under, so we'll just stick to the most common classes: common stocks, and exchange-traded funds (ETFs). 

There is such thing as value investing, when you want to buy companies that are valued lower than what the company is worth. But there's more to it than that. What does it mean to be undervalued? In a word, that means there is a massive margin of safety, that the company could (and most likely will) rise in value. 

So the advice is to only buy stock in companies that you understand – not just on the basis of a valuation check, but on a more fundamental level.

Investing in stocks doesn't require special expertise or follow any rules. But if you're a total newbie to the stock market, you might be nervous about buying individual stocks. Since you don't know what to expect, it's best to stick with a low-cost index fund.

Conclusion

Stock investing is not a rocket science and pretty much anyone can start investing in stocks. But before you get started, it doesn't hurt to do some research, find the right broker and the right stocks to invest in. 

This Monday the US stock indices were down 2-3%. In addition, during the three last weeks the medium-term top has been formed. It was caused by the recent situation with a real estate collapse in China that forced investors to sell risky assets in a fear of contagion. 

So what actually happened? The Chinese real estate giant Evergrande will likely default this week, possibly causing some tremors in the financial markets as several US banks have notable holdings of Ever bonds. The company is scheduled to pay its interest on 23^rd and 29^th of September. However, Evergrande is scheduled to pay interest on bank loans Monday, with a one-day grace period and if it fails to arrange an extension of Monday's payments, it could be in technical default as soon as Tuesday.

When the most extensive sell program happened in May, it took the markets several days to shake it off before running higher again. Should the exact scenario repeat, we might see further selling before going higher again. 

The banks should be prepared for this massive sell-off to escalate and Morgan Stanley seems to have had it right from the start when set the lowest target on Wall Street which is currently at 4,000 USD for the SP500 index. 

"With our year-end target 10% below current levels, our view is clear: the mid-cycle transition will end with the rolling correction finally hitting the S&P 500." The bank reiterated its target this week. They expect the correction to continue amid many factors - rising inflation, tapering expectations, extremely overbought market, and more. 

Later this week, the Federal Open Market Committee (FOMC) meeting takes place, and the Federal Reserve (Fed) would need to sound really dovish to calm the markets otherwise it could risk a much steeper sell-off.

On Monday, West Texas Intermediate (WTI) oil climbed above the critical 70 USD, while the European Brent benchmark advanced toward 74 USD. Oil continued to rise amid Hurricane Ida’s impact on US output. About three-quarters - or about 1.4 million barrels per day - of the offshore oil production in the Gulf of Mexico has remained halted since late August.

“Hurricane Ida was unique in having a net bullish impact on US and global oil balances - with the impact on demand smaller than on production,” Goldman Sachs analysts said in a note from last Friday.

We could say that USD had affected this changes in oil price, but that is not quite correct. However, the EURUSD pair managed to get back above its 50-day average at 1.18, and if it produces a rally, oil might be further supported. 

The WTI is now near 69.60 USD and it managed to push above the 50-day moving average, confirming the bullish bias and setting the short-term outlook to bullish. Additionally, staying above the psychological level of 70 USD is also supporting the bullish case. Lastly, the price managed to rise strongly above the bearish trend line, which had been limiting oil since July, ending the medium-term downtrend. 

Oil is now trying to close above the resistance of 70.55 USD, possibly leading to another leg higher, targeting the 74 USD zone.  Alternatively, there are several strong support zones - the psychological barrier at 70 USD, the 50-day average at 69.60 USD, and the broken trend line at 69 USD.

The answer to this question is pretty simple to understand. The main difference has to do with time. 

When it comes to stock trading, you’re buying and selling shares in companies within a short window of time with the goal of making a profit in the shorter term. To do that, traders jump in and out of stocks within weeks, days, even minutes. Swing traders hold a trade for days or weeks. Day traders are focused on trading that stock within a day and scalp traders may hold a position for just a few minutes before selling. 

However, it takes a bit more time with investors. Stock investing is more about buying and holding shares for longer-term gain. That means months, years, even decades. You might buy a small percentage of shares, or a larger number of shares, or the entire company for that matter. With investing, it matters not how much you buy, but how long you wait. 

But how do they know how long to wait? It depends on the Investor’s analysis, and the valuation they’ve gleaned from research they’ve done on the company’s valuation over time. 

The Benefits of Trading Stocks

With the help of the technical analysis traders try to predict the direction of the stock and the possible profit and based on this analysis they buy and sell stocks  and they can do it as often as they like. They buy at a specific price and at a certain time, and then that stock is theirs to trade. Some stocks will be bought and held a bit longer than others, because they may generate a steady stream of income for a short window of time. While other stocks are bought and sold within a few hours, and sometimes minutes, because that’s what their analysis has indicated will generate the most profits. 

The Benefits of Buying Stocks

Stocks present an investment opportunity that can appreciate significantly in value. The first thing to note about investing in stocks is that shares are not backed by any government or company, but actually represent ownership in a company or a business. If a company’s stock rises in value, it's because of the company’s own merit and its ability to make money through sound management. The only risk with stock investment is that shares could depreciate over time. 

Conclusion

So, the main thing that helps to differentiate investing and trading in stocks is timing. Short-term gains are more for the traders, while investors buy shares for a longer-term reward. Investors and traders also have a different focus. Investors study a company’s longer-term valuation, while traders are keyed in on shorter-term events that could make a dramatic impact on the stock’s price. 

Last Friday the monthly non-farm payrolls were released and they showed the US economy created only 235,000 new jobs in August, way below the expected 750,000. However, this helped traders to sell the USD. The unemployment rate slid (improved) to 5.2% from 5.4% previously, while average hourly earnings (wage growth) rose to 4.3% from 4.1% previously.

Weaker than expected Non-Farm Payroll (NFP) numbers have affected the sell-oof of the USD. But there is always a winner in all situations and in this case it’s gold and silver that are flourishing because of the weaker dollar. Gold jumped above 1,830 USD, and silver tested its 50-day moving average near 24.85 USD. It really looks like some bullish momentum has finally returned to these markets.

The Jackson Hole so much expected speech didn’t bring any news about changes in Feds plans. Powell didn’t even provide any details on when the Fed might taper its 120 billion USD Quantitative Easing (QA) program; he simply stated that the Fed plans to do it if the economy continues to strengthen - which, again, is what he has been saying for months now.

It looks like after the weakened NFP numbers for last month the investors are sure that the Fed is going to again delay its tapering decision. It was expected to happen in November, but now it seems like December it is, or with some analysts already calling for a 2022 start.

Therefore, gold surged, along with silver and other commodities. As a result, gold is on track to jump above the critical resistance of 1,835 USD, where the metal has already failed many times. Silver is staging a similar comeback, currently capped by the 50-day average at 24.85 USD. Once that is cleared, a powerful rally toward previous highs/ lows in the 25.60 USD zone is expected.

The current situation seems to be bullish for the metals market. The Fed will remain dovish as long as it can. Inflation is already raging in all parts of the economy. As a result, real yields continue to decline, supporting precious metals and sinking the USD.