This introduction was written to provide a basic understanding of the stock market and introduce the terms and concepts that you will encounter as you progress as an investor. This basic vocabulary and knowledge is vital because it is the foundation of your future understanding and success in the market. I was extremely honored when my friend and colleague, Lan Turner, invited me to write this portion of the Track ‘n Trade High Finance manual. I hope you will find it to be a great asset. If this is your first introduction to the stock market, I want you to know how excited I am for you.

I am an investor with extensive experience in many markets. Stocks are the only investment I have found that allow you the flexibility to decide how you want to interact with the market. You can choose active and aggressive participation in the short term for quick money. You can take a very relaxed and passive approach in the long term for a safe investment. No matter which strategy you choose, Track ‘n Trade will supply you with the tools and information you need to excel in the stock market.

Welcome to the tight-knit investing community that we have created for you as an investor. We are here to teach you how to get an edge on the market, helping you grow wealthy as a successful trader!

Equity security is the formal term for stock in a publicly traded company. When you hear the word "equity" it means ownership, which is what a share of stock represents. Similarly, bonds are always equated with the word "debt." The word "security" references either stocks or bonds. It is defined as the evidence of ownership in the case of stocks, and evidence of debt in the case of bonds. Thus, stocks are an equity security while bonds are a debt security.

There are three types of stocks: common, preferred, or convertible. As the name says, common stock is the most common type of equity security. The term common stock is used for any equity security that has no special dividend rights and has the lowest priority claim in the event of bankruptcy. Owners of preferred stock, in contrast, usually receive preferred treatment when it comes to receiving dividends of cash payoffs in bankruptcy. There are also convertible securities that start as one type but can be converted into another if the investor desires. Most convertible securities are preferred stock or bonds that are convertible into common stock.