Stock Market For Beginners: Pay Attention To The FED

Stock Market For Dummies

This next stock market for beginners post will talk about a committee that has a good control of how the stock market works, the Federal Reserve. The Fed does a number of things. They control interest rates, money supply to name a couple. Basically, the Fed's main job is to keep the economy stable. And we know from a prior stock market for dummies rule, the economy is crucial to how the market moves.

How does the stock market work? Like I said, the economy has a big impact on how the stock market will move. If the economy is bad, the market will fall. If the economy is good, the market will rise. It's as simple as that.

So the Fed's actions really have a strangle hold on which way the market will move. You know that when the Fed doesn't do anything, the economy is probably doing good and the market will probably represent that. But when the Fed actual makes a change, watch out, the economy may be on a down slide.

Follow this stock market basics rule, always be aware of what the Fed does. By listening to any Fed conferences and reading the minutes of their meetings, you can learn the state of the economy and their intentions of any actions they make.

To help you out a little more with this stock market for beginners post, there are a couple of actions which trigger market selling. When rates increase, market selling happens. And when money supply is decreased, market selling happens. Those are the two main Fed actions you need to be aware of with this stock market for dummies rule.

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I can’t teach everybody how the stock market works as a whole because there is too much to cover. But reading up on sources will get you close to being a solid investor.

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