How to Monitor the Stock Market

Investors look towards the stock market as a means to grow and preserve capital above the rate of inflation. Beyond stocks, financial media has emerged as a cottage industry, with books, magazines, and seminars readily available to serve the voracious need for information. All investors are tasked with the challenge of filtering out infinite sources of contradictory information – to suit their particular financial objectives. For many, monitoring the stock market is a full-time job.

Financial Objectives

Prospective investors should outline financial objectives prior to putting money to work within the stock market. From here, time spent researching stocks should correlate directly to the amount of money that is on the line. In many cases, smaller investors may even prefer to hire a professional, to research, invest, and disseminate information upon their behalf. In broader terms, all Americans may take at least passing interest in monitoring the stock market, as an informal barometer to measure the strength of the overall economy and job creation.

Stock Market Benchmarks and Quotes

Identify the major stock market benchmarks, or indexes that gauge the performance of the particular segment of the economy that largely correlates to your financial objectives and portfolio. American investors primarily monitor the Dow Jones Industrial Average (DJIA), Standard and Poor’s 500 (S&P 500) and NASDAQ Composite as market benchmarks. The DJIA and the S&P 500 represent larger corporation, while the NASDAQ mostly covers the tech economy. Financial media post these three benchmarks as an overview and confirmation for additional news.

For example, positive readings for all three major indexes mean that the economy is showing signs of strength, while your individual stock portfolio is likely increasing in value upon the day. Next, you may check stock quotes related to individual equities with the help on online portals, newspapers and streamed tickers from business broadcasts. The frequency and detail with which you monitor stock market benchmarks and individual quotes relates to your trading activity. Day traders check markets throughout the day. Long-term investors may review quotes quarterly.

Compile News Sources

Stock quotes and benchmarks simply supply price information. While technical analysts rely strictly upon price and volume data, fundamental analysis calls for supporting economic information to make profitable investments. With time, each investor will compile his own list of preferred sources for news in the form of cable outlets, magazines, newspapers, online financial portals, and radio broadcasts. A Diversity of information is critical to appraise multiple angles of each story, in order to arrive at thoughtful conclusions that lack bias.

The business, national and local news sections are of special interest to investors for coverage of commercial and political events that act to reflect upon and foreshadow the direction of the stock market. Corporate annual reports present raw data and financial statements that may be reconciled against stock market performance for individual stocks. Sophisticated investors mat contract corporate investor relations departments for annual reports and presentations.