Hi, I am Sam. I am a senior at MHS and I plan on going to college after graduation. This my last ELI ever! 
This ELI is on investing or using money to make more money, a rather broad topic. I have decided to focus on three particular aspects of investing in the stock market, the first being general strategies, followed by valuing stocks, and finally creating a simulation of a portfolio. I will go into more detail later on. I would like to define a few useful terms before I continue. First, a stock is a portion of a company. Second, a stock market exchange is a place where investors gather to buy and sell stocks. Third, a portfolio is the range of investments a person or a group owns. These are the most rudimentary definitions, more specific knowledge is not necessary for comprehension because I will be explaining in more depth as I go.
Why care about investing?
This is a real million dollar question, no pun intended. The market could grow your money about 270 times the original amount, meaning all it takes is about $4000 to become a millionaire. Sounds too good to be true? You would be correct because of the risks involved. Risks aside, each year the average of stock growth for the entire market is about 20%. This means that annually. If an investor puts money into the market, it will grow to 120% minus fees. However, unless you have more that $500,000 in savings, there are more risks in the market than putting money into banks, since the market is far more volatile. Side note banks are only federally insured for $450,000 and since many banks are getting cyber attacked and robbed clean, they carry risk for people with lots of savings. I hope to interest as many high schoolers as possible in stock market investing, since they still have the rest of their lives ahead of them, meaning if they can get interested, they could make more money in the market over their lifetimes, becoming millionaires by the time they retire. Investing is for everyone if they do the proper research.
What are common market strategies?
A better definition of my ELI would probably be how to reduce my risks in the market. I have completed my first goal, and as a result I have found that there are four major investment strategies. (A quick disclaimer: each investor has his or her own strategy and these are just broad categories.) The first and by far the most popular is value investing. This strategy was pioneered by Benjamin Graham who was Warren Buffett's economics professor. This strategy is based on the simple premise of buy what you know, hold it for as long as possible and then sell it for a profit. The next strategy has a few names but my favorite name is psychological investing. This strategy is to buy before everyone else by figuring out what the next hot stock will be. The third common strategy is called charting. This strategy uses computer graphs and various math to attempt to find past trends in a stock that will predict future movements in a stock. The last strategy “camp” is the unconventionals or others, which use some method to attempt to predict stock movement. An example of this is the astrological investors who use star maps to predict stock movement. A final disclaimer: each strategy has its strengths and weaknesses. If you are interested, look more into them on your own or tune into my second blog post coming soon.
In conclusion, you can make a better fortune in the market if you take and reduce the risks necessary to make money in the stock market. The earlier the start in the market the more potential profit. The first step of using the market is understanding what it is and the accompanying risks. Creating a general strategy is a good second step. The final step is to buy and value stocks and possibly making money.
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