Course Content
Introduction
The stock market is a marketplace where shares of publicly listed companies are bought and sold. It plays a central role in the modern economy, acting as a bridge between businesses that need capital and investors who have money to invest. The origins of the stock market trace back to the early 1600s, when the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange. This allowed the company to raise money from the public to fund its trade ventures, in return for a share of the profits. Over time, this concept evolved, and today, stock markets exist all over the world, with major exchanges like the New York Stock Exchange (NYSE), NASDAQ, and London Stock Exchange facilitating trillions of dollars in trade. At its core, the stock market enables businesses to grow. By offering shares to the public through a process called an Initial Public Offering (IPO), companies can raise large amounts of money to expand operations, invest in research, or develop new products—without having to rely solely on banks or private lenders. In return, investors get the opportunity to share in the company’s success through rising share prices and dividends. Investing in the stock market can be a powerful way to build wealth over time. Wise investments in strong companies can generate solid returns, especially when held for the long term. Many individuals have grown their savings substantially by investing in companies that have thrived. However, it’s important to remember that the stock market carries risks. Prices can go up, but they can also go down—sometimes sharply. Economic downturns, company mismanagement, or shifts in the global market can all lead to losses. For beginners, it's essential to approach investing with caution, avoid chasing “get rich quick” schemes, and take the time to understand what you're investing in. In short, the stock market is a powerful tool for economic growth and personal financial development—but like all tools, it must be used wisely.
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Introduction
Stock Markets Around The World
Listing On A Stock Market
How Stocks are Bought and Sold
Trade Date vs Settlement Date, What is T + 2?
What Is A Stock Market Index?
ETF’s and Index Funds
Fundamental Analysis
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Fundamental Analysis Introduction
Understanding Revenue and Profit
Earnings Per Share and PE Ratio
Understanding the Balance Sheet
Understanding Cashflow
Dividends – How Investors Earn Income From Their Shares
What Causes Stock Prices To Rise And Fall
Understanding Market Capitalization
Technical Analysis
Along with Fundamental Analysis, Investors increasingly rely on Technical Analysis to decide whether to buy or sell a stock. Here we will explore the main techniques.
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Introduction to Technical Analysis
How To Read A Price Chart – The Basics
Understanding Support and Resistance Levels
Identifying Trends and Drawing Trendlines
Understanding Moving Averages
Introduction to Momentum Indicators
Chart Patterns – Spotting Setups in the Market
Volume – The Power Behind a Price Movement
Investing Safely and Profitably
How do professionals invest safely and profitably? Some key concepts such as position sizing and stop losses.
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How To Place Trades And Manage Risk
Using A Trailing Stop To Protect Profits and Limit Loss
Diversification and Portfolio Management
Taking Profits
Common Investor Mistakes And How To Avoid Them
A Quick Word On Taxes
Summary and Beginner’s Checklist
10 Must Read Books for Investors and Traders
Beginners guide to investing in the Stock Market

What Is A Stock Market Index?

 

A stock market index is a way to measure the overall performance of a group of selected stocks. Think of it like a scoreboard for a particular part of the market—it shows whether that group of companies is gaining or losing value over time.

 

Indexes help investors:

  • Track the market’s performance

  • Compare how their investments are doing

  • Understand how the economy or certain industries are behaving

 

 

How Indexes Work

 

Each index includes a set number of stocks, chosen to represent a certain sector, region, or the entire market. The index value rises or falls based on the performance of those stocks.

 

For example:

  • If most companies in the index increase in value, the index goes up.

  • If they lose value, the index goes down.

 

Indexes can be price-weighted, market-cap weighted, or equal-weighted—which just refers to how each company’s influence on the index is calculated.

 

 

Major Stock Market Indexes Around the World

 

Here are some of the most widely followed indexes and what they represent:

 

 

S&P 500 (USA)

 

  • Tracks the 500 largest publicly traded companies in the U.S.

  • Covers around 80% of the total U.S. stock market.

  • Considered the best single indicator of the U.S. stock market’s health.

  • Includes companies like Apple, Microsoft, Amazon, Google (Alphabet), and Tesla.

 

Dow Jones Industrial Average (DJIA)

 

  • Includes 30 large, blue-chip companies in the U.S.

  • One of the oldest indexes (founded in 1896).

  • Price-weighted—so higher-priced stocks have more impact on the index.

  • Companies include Coca-Cola, Boeing, McDonald’s, and Goldman Sachs.

 

NASDAQ Composite

 

  • Contains over 3,000 companies, mainly in the tech sector.

  • Includes giants like Apple, Meta (Facebook), Netflix, Nvidia, and Amazon.

  • Known for being tech-heavy and more volatile.

 

 

ASX 200 (Australia)

 

  • Tracks the top 200 companies listed on the Australian Securities Exchange.

  • Includes major Australian companies like BHP, Commonwealth Bank, CSL, and Woolworths.

  • Seen as the main benchmark for the Australian economy.

 

 

FTSE 100 (UK)

 

  • Represents the 100 largest companies on the London Stock Exchange.

  • Includes international names like Shell, HSBC, GlaxoSmithKline, and British American Tobacco.

 

 

Nikkei 225 (Japan)

 

  • Tracks 225 leading companies on the Tokyo Stock Exchange.

  • Includes major Japanese brands like Toyota, Sony, Nintendo, and Panasonic.

  • Similar in structure to the U.S. Dow Jones index.

 

 

Shanghai Composite Index (China)

 

  • Includes all stocks (A-shares and B-shares) listed on the Shanghai Stock Exchange.

  • Heavy with large Chinese firms like PetroChina, ICBC, and China Life Insurance.

  • Reflects the state of China’s more state-influenced economy.

 

 

EURO STOXX 50 (Europe)

 

  • Tracks the top 50 companies in the Eurozone (countries that use the Euro).

  • Includes major firms like LVMH, Siemens, Allianz, and Volkswagen.

  • Useful for understanding broader European market trends.

 

 

Why Indexes Matter

 

Indexes are used for:

  • Benchmarking – comparing how individual investments perform.

  • Investing – many investors buy index funds or ETFs that track these indexes, offering instant diversification.

  • Economic Signals – indexes often reflect the health of an economy or sector.

 

When news reports say “the market was up today,” they usually mean that one or more major indexes rose.

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Stock Market Course