One of the things that makes it hard for beginners to get started buying stocks is the intimidation factor. Just watch an hour of CNBC and you will hear all sorts of stock market terminology bandied about by anchors and guests all wearing fancy suits who sound educated and extremely knowledgable.

Its enough to stop a beginner in their tracks and make them give up before they ever get started.

Some of the fancy verbiage you will hear time and time again but may wonder what it really means. It all sounds intelligent (and even seems to make sense) until you really break it down and analyze it. These "sayings"/fancy words include:

1) "The easy money has already been made"
2) A stock is "overbought" or "oversold"
3) "You should buy on weakness"
4) "The market is in a bottoming process"
5) "There is a lot of cash on the sidelines"
6) "We are constructive on the market"
7) "Cautiously optimistic"
8) "Its a stock pickers market"
9) "Stocks are down on profit taking"
10) "We are taking a wait and see approach"

You can find more silly stock phrases in this very well written article that also explains why they are so meaningless. These phrases / words are used to make the analyst sound smart without having him/her commit to any real opinion.

The stock market has its own language and those in the industry who are out there on all the different media are good at using it to convince you, the homegrown average investor, that they are smarter than you are.  In many cases they may be (about the stock market) as it is their job but I hate the fact that they often use such meaningless jargon while trying to make themselves look more "in the know" than they really are.

No comments: