Did you know the global stock market is worth over $95 trillion1? It’s a huge place where people buy and sell shares of companies. This market can help you grow your wealth. It’s key to learn the basics to make smart choices and meet your financial goals.
The stock market has many investment options. You can choose from common and preferred shares, or dive into the details of exchanges like the New York Stock Exchange (NYSE) and NASDAQ1. Knowing how the market works, what affects stock prices, and the role of shareholders is vital. This knowledge helps you move through the complex world of finance.
Key Takeaways
- The stock market is a place where investors buy and sell shares of companies.
- Common and preferred stocks are the main types of stocks you can invest in.
- Big exchanges like the NYSE, NASDAQ, LSE, and TSE play a big role.
- Many things affect stock prices, including how well a company does, the economy, and what investors think.
- Stocks often give higher returns over time compared to other investments.
Understanding the Stock Market
The stock market is a key part of capitalism, where people buy and sell shares of companies2. These shares mean owning a piece of the company. They can be traded on places like the New York Stock Exchange (NYSE) or the NASDAQ2. It’s important to know how the stock market works if you want to invest wisely.
What is the Stock Market?
The stock market is a place where companies sell shares to investors2. It helps companies get money by selling stocks, and investors buy hoping to make money from the company’s growth2. Over 58,000 companies worldwide are traded on stock exchanges, making it a big part of the financial world2.
How the Stock Market Works
The stock market has stock exchanges, brokerage firms, and investors working together3. The NYSE and NASDAQ are the biggest exchanges in the U.S., with a huge amount of money flowing through them3. Companies can raise money by selling shares through an IPO or other ways3.
Many things affect the stock market, like the economy, company earnings, and government actions4. Big indexes like the S&P 500 and Dow Jones show how the market is doing4. Investors use different methods to pick stocks and make smart choices3.
Knowing how the stock market works is key for anyone wanting to invest wisely. By understanding its basics, people can make better choices and reach their financial goals2.
| Stock Exchange | Market Capitalization |
|---|---|
| New York Stock Exchange (NYSE) | $26.11 trillion3 |
| NASDAQ | $22.42 trillion3 |
| Shanghai Stock Exchange | $7.37 trillion3 |
“The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett3
Importance of Financial Literacy
Financial literacy is key to getting good at financial education, personal finance, and investment knowledge. It means knowing about budgeting, saving, investing, and handling debt. In today’s world, it’s crucial, especially when dealing with the stock market5. Having a solid financial literacy helps people make smart choices, understand the financial world, and reach their financial goals.
A survey by the Federal Reserve Bank of San Francisco in 2021 showed that only 20% of payments were in cash, while 28% were on credit cards5. This shows how important it is to know the effects of our financial choices. It also points out the need for better financial education5.
The U.S. Federal Reserve System Board of Governors found in the “Economic Well-Being of U.S. Households in 2022” report that 28% of Americans had no retirement savings5. About 31% of those not yet retired felt their savings were not enough. These facts show the importance of understanding personal finance, like saving for retirement and managing debt.
Research by the TIAA Institute showed that even though many millennials think they know a lot about finance, only 19% got basic financial questions right5. Also, 43% of millennials use expensive financial services like payday loans and pawnshops, and over half don’t have an emergency fund5. These numbers highlight how crucial financial education is, especially for young people, to make smart financial choices.
Being financially literate helps people make better decisions, prepare for emergencies, and reach their financial goals5. Knowing about financial concepts and products helps set and meet financial goals. It builds confidence in making big financial decisions and handling life’s financial challenges5.
In conclusion, financial literacy is very important. By learning about personal finance and investment knowledge, people can make smarter choices, avoid big mistakes, and meet their financial goals. Supporting financial education programs and spreading the word about financial concepts can greatly improve the financial health of individuals and communities5.
“Financial literacy empowers individuals to make better financial decisions and avoid potentially costly mistakes.”
The Benefits of Investing
Investing in the stock market can help you build a secure financial future. It offers the chance for long-term wealth growth, spreading out your investments, and joining in on a company’s success. This makes the stock market a great way for investors to reach their financial dreams6.
Wealth Accumulation
Investing in stocks has usually given better long-term gains than other types of investments6. Even though stock prices can go up and down, they tend to even out over time. This means you could build a lot of wealth6. Stocks also get special tax treatment, which can lessen the effect of taxes and inflation on your earnings6.
Portfolio Diversification
Spreading your investments across different types of assets, like stocks, can reduce risk and make your investments more stable6. Common shares can grow in value, give you regular income, let you vote, be easy to sell, and have good tax benefits6. Preferred shares offer steady income, higher dividends, and special features like saving up unpaid dividends or turning into common shares6.
Participation in Company Growth
By investing in the stock market, you can be part of a company’s growth and success. Companies can pay dividends, giving you regular income and boosting your returns6. These dividends can make your investment more stable, provide income, and help the company stay strong6. In Canada, dividends are taxed less than interest, which means you keep more of your earnings6.
Using the stock market, investors can create a varied portfolio, grow their wealth over time, and support the companies they believe in. This helps them meet their financial goals and be part of the economy’s growth.
Risk Management Strategies
Investing in the stock market needs a smart plan for managing risks. Successful investors know how key diversification, asset allocation, and setting realistic goals are. These steps help protect their money and keep their investments safe7.
Diversification
Spreading your money across different areas like sectors, industries, and types of assets is a smart move. This way, if one investment does poorly, it won’t hurt your whole portfolio7. It opens up more chances for making money and reduces the chance of big losses7.
Asset Allocation
Asset allocation means putting your money where it fits your risk level, time frame, and goals. It balances the chance for growth with the need for safety and risk control7. By matching your investments with your goals, you can handle the risks of the stock market better7.
Setting Realistic Expectations
It’s important to have clear ideas about what you might earn and lose in the stock market. The market can be unpredictable, with ups and downs7. By being realistic and disciplined, you can make smart choices and get through market changes7.
| Risk Management Technique | Description | Benefit |
|---|---|---|
| Diversification | Spreading investments across different sectors, industries, and asset classes | Minimizes the impact of any single investment’s underperformance and explores more opportunities |
| Asset Allocation | Strategically distributing investments based on risk tolerance, time horizon, and financial goals | Balances the potential for growth with the need for stability and risk mitigation |
| Setting Realistic Expectations | Maintaining a disciplined approach and adjusting expectations to the unpredictable nature of the stock market | Enables informed decision-making and navigation through periods of market volatility |
Managing risk well is key for investors aiming for long-term success. By using diversification, smart asset allocation, and realistic expectations, you can lower the chance of losses and improve your investment journey78.
“Successful trading requires a deep understanding of financial markets, the ability to read price movements, disciplined risk management, and emotional control.”
Risk management is vital for all investors, no matter their approach. Whether you trade often or invest for the long haul, strong risk management can guide you through the stock market’s challenges and help you reach your financial goals78.
Developing an Investment Strategy
Creating a solid investment strategy is key to reaching your financial goals and making the most of the stock market. Whether you prefer safe investments or like to take risks, it’s important to match your investment strategy with your risk level and goals9. A good investment strategy considers your time frame, how much risk you can handle, and what you want to achieve, helping you navigate the stock market with a clear plan.
One common investment strategy is passive index investing. This method aims to follow the performance of a big market index like the S&P 5009. It’s become more popular, with about half of all trading now in mutual and exchange-traded funds being in these types of funds9. The benefits include lower costs because there’s less trading, and it spreads your money across many sectors9. This way, you could see growth that matches the market over time9.
Value investing looks for stocks that are cheaper than they should be, with big potential for gains when their true value is recognized9. These investors often look at sectors that are doing poorly, adding variety to your portfolio9. On the other hand, growth investing focuses on the teams leading companies and the state of the economy and sectors9.
Momentum investing is about buying stocks that are going up and selling them when they might drop, based on market trends9. No matter your investment strategy, knowing your risk level and matching it with your strategy is vital for a balanced and lasting investment plan9.
Dollar-cost averaging is a common investment planning method. It means putting the same amount of money into investments at regular times, no matter the market’s state10. This can lessen the effect of market ups and downs and could lead to good long-term results10.
Building a strong investment strategy means understanding your financial goals, how much risk you can take, and the investment options you have. By matching your investment planning with your investment objectives, you can move through the stock market with confidence and aim for your financial dreams91011.
“The key to successful investing is not picking the right stocks, but rather managing risk and staying disciplined with your investment strategy.”
Researching Potential Investments
Before jumping into the stock market, it’s key to do deep investment research on your options. Look at financial statements, check how companies are doing, and keep up with market trends. This helps you make smarter choices and spot chances for growth in the stock market.
Analyzing Financial Statements
Looking at a company’s financial reports gives you important info. You’ll see its financial health, profits, and growth chances. Important things to look at include revenue, net income, earnings per share, and more.12
Evaluating Company Performance
Looking at how a company works and stands out in its field is also crucial. Think about its main sources of income, its edge over competitors, and the strength of its leadership. This helps you understand its future potential13.
Staying Informed on Market Trends
Keeping up with market news, economic signs, and new trends is vital. Warren Buffett suggests focusing on understanding the business, not just stock prices.12
By using financial statement analysis, company evaluation, and market trend analysis, you can get a full view of investment options. Getting better at analyzing through your own research is key for smart stock market decisions.13
“The best companies are like families – you want to get to know them intimately. The more you understand a business, the better you can judge its future prospects.”
| Broker | NerdWallet Rating | Fee per Online Equity Trade | Account Minimum | Promotions |
|---|---|---|---|---|
| Broker A | 4.9/5 | $0 | $0 | 1 Free Stock after linking a bank account (stock value range $5.00-$200), no other promotions available |
| Broker B | 4.3/5 | $0 | $0 | 1 Free Stock after linking a bank account (stock value range $5.00-$200), no other promotions available |
| Broker C | 5.0/5 | $0 | $0 | 1 Free Stock after linking a bank account (stock value range $5.00-$200), no other promotions available |
The Role of Emotions in Investing
Investing in the stock market can feel like a wild ride. Emotions like fear, greed, and panic can often cloud our judgment and lead to irrational investment decisions.15 Learning about emotional intelligence and sticking to a disciplined investing plan can help us avoid these emotional traps. This way, we can stay focused on our long-term goals16.
It’s key to know how psychological factors affect our investment choices. Emotions like the fear of missing out, the tendency to hold onto losing positions, or the desire to chase short-term gains can all influence our investment behavior.16
- Research by Vanguard shows that about 40% of the value an advisor provides their clients is emotional16.
- Psychologists have found that people with high emotional intelligence, who are aware of and use emotion to enhance thought, are better at screening out the effects of emotion when making decisions16.
- Hormones like cortisol and adrenaline are released when making choices, influenced by emotions, as per research in the field16.
Vanguard research emphasizes the importance of emotional aspects in financial decisions, such as feelings of confidence with portfolios, satisfaction with choices, and excitement for the future, constituting around 40% of the advisor’s value to clients.16 Recognizing and managing these emotional factors can help us make more rational and informed investment decisions.
Emotional investing is highlighted as a cycle where market emotions influence investment decisions, suggesting strategies to balance emotion and logic such as reframing decisions, enacting a waiting period, becoming more aware of thoughts, and holding oneself accountable.16
| Metric | Low Consumer Confidence (Below 66) | Moderate Consumer Confidence (66-112) | High Consumer Confidence (Above 113) |
|---|---|---|---|
| Historical Stock Returns | Nearly 15% per year15 | Up 6%15 | Just under 3%15 |
| TSX Index Returns | Annualized average of 14.7%15 | N/A | 2.8%15 |
By understanding the role of emotional intelligence, investment psychology, and behavioral finance, investors can develop strategies to manage their emotional responses. This helps us make better decisions in the stock market16.
“Emotion is the enemy of rational decision-making in the investment world.” – Peter Lynch, legendary investor
Using methods like passive index investing, diversification, and dollar-cost averaging can help keep emotions in check while trading17. By understanding the psychological factors that influence our investment behavior and developing strategies to manage our emotions, we can become more successful and disciplined investors16.
Trading Styles: Day Trading, Swing Trading, and Position Trading
Investors can choose from different trading styles based on their risk level, time they can dedicate, and goals. These styles include day trading, swing trading, and position trading. Each style has its own set of characteristics and needs18.
Day trading is fast-paced, focusing on quick trades to make money from short-term price changes18. It demands constant focus, fast decisions, and a big risk tolerance. On the other hand, swing trading holds positions for days to weeks, aiming for medium-term trends19. This method cuts down on costs, leads to better trading decisions, and allows for easy adjustments18.
Position trading is about holding stocks for a long time, aiming for the company’s long-term growth and market trends20. It suits those who prefer stability and keeping their capital safe over quick growth20. These traders might use strategies like covered calls and straddles to manage risks and boost returns20.
Knowing what each trading style offers can help investors pick the right one for them18. Active trading, like day and swing trading, can lead to big gains but requires more time, effort, and costs18. Position trading seeks bigger gains with less cost but needs strong risk management and can be less liquid18.
The choice of trading style depends on an investor’s goals, how much risk they can take, and their lifestyle181920. By understanding each approach, investors can make smart choices and find a strategy that fits their needs and likes181920.
Choosing the Right Brokerage
Finding the right brokerage is key to doing well in the stock market. It’s important to think about your trading style and what you want to achieve. Whether you trade daily, swing trade, or invest for the long term, you need a brokerage that fits your strategy.
Brokerages for Day Traders
Day traders need a platform that works fast, has great charting tools, and gives real-time market data. Interactive Brokers, TradeStation, and TD Ameritrade’s thinkorswim are great for day traders. They help you make quick decisions and execute trades efficiently21.
Brokerages for Swing Traders
Swing traders and long-term investors might like brokerages with lots of research tools and easy-to-use interfaces. Charles Schwab, Fidelity, Robinhood, and E*TRADE offer what swing traders and buy-and-hold investors need22.
Brokerages for Long-Term Investors
Long-term investors might find robo-advisors like Betterment and Wealthfront appealing. These platforms manage your investments automatically, offering diversified portfolios and tax benefits. They’re great for those who prefer a hands-off approach22.
When picking a brokerage, look at their fees, account requirements, investment choices, research tools, and how easy they are to use. Fees and other costs can affect your earnings, so it’s smart to compare different brokerages21.
Also, make sure the brokerage is safe and protects your money. Check if they’re part of groups like the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). These groups help keep your investments safe22.
| Brokerage | Commissions | Account Minimum | Key Features |
|---|---|---|---|
| Robinhood | $0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold | $0 | No commissions, access to trade fractional shares and cryptocurrency |
| SoFi Active Investing | $0 for stocks, $0 for options contracts | $0 | Modern investing experience, particularly for beginner and long-term investors |
| E*TRADE | Commission-free; other fees apply | $0 | Low fees, many account types, advanced features through Power E*TRADE platform |
The best brokerage for you depends on your investing goals, how much risk you can take, and your trading style. By looking at what each brokerage offers, you can find the one that fits your investment needs23.
https://www.youtube.com/watch?v=6YWOkO56ed8
“Aligning with the right online brokerage service is crucial to investing success for approximately 93% of investors.”22
Opening and Funding a Brokerage Account
Starting your journey in the stock market begins with a brokerage account. You’ll need to provide personal details, pick the right account type, and fund it. Knowing how to set up and fund your account makes starting your financial journey smoother.
Choosing a brokerage account means picking a platform that fits your trading style and goals. It’s smart to look for accounts with lower fees since they can eat into your earnings24. Some accounts don’t require a minimum balance, which is great for cautious starters24.
After picking your brokerage, you’ll fill out an application with your ID, tax, and income info. This usually takes about 30 minutes25. Once approved, you can fund your account with a bank transfer, wire transfer, or check. Your money will be ready for trading in 24 hours to a week25.
There are different account types to choose from, like individual, joint, and retirement accounts. Traditional IRAs let you contribute without taxes and get tax benefits on earnings until you withdraw24. Some brokerages offer free trading, meaning no fees for buying or selling stocks24. But, some accounts might need a minimum balance, which can vary a lot24.
Fractional investing lets you buy part of a share, perfect for those with less money or new investors24. Many brokers now have free trading for stocks26. Some, like SoFi Invest®, offer automated investing with no minimum deposit or balance requirement26.
By understanding how to set up and fund your brokerage account, you’re setting a strong base for your investments. Always practice trading first to learn the ropes and get familiar with the market25.
“Investing is a marathon, not a sprint. It takes time, patience, and discipline to achieve long-term financial goals.”
stock market Analysis: Fundamental and Technical
Stock market analysis uses both fundamental and technical methods27. Fundamental analysis looks at a company’s value by checking its finances, industry trends, and management27. Technical analysis studies past prices and volumes to spot patterns that might predict future prices27.
Fundamental Analysis
Fundamental analysis digs deep into a company’s finances and market position27. It examines income statements, balance sheets, and cash flow to see if a company is profitable and stable28. Analysts also look at the economy, industry trends, and competition to find a company’s true worth27. This method takes time but can find companies that are worth investing in for the long term27.
Technical Analysis
Technical analysis uses statistical trends and past data to make quick decisions27. It turns complex financial info into simple charts27. Analysts might look for stocks that are doing well or setting up for a breakout29. They also watch for pullbacks in the trend29.
Many investors use both fundamental and technical analysis to make better choices27. This mix helps understand stocks better and can lead to better investment results27.
“The essence of investment management is the management of risks, not the management of returns.” – Benjamin Graham, renowned investor and author of “Security Analysis” and “The Intelligent Investor”27.
Benjamin Graham and Charles Dow have greatly influenced stock market analysis27. Graham focused on fundamental analysis and managing risks27. Dow’s Dow Theory looked at market trends to predict prices27.
Using both fundamental and technical analysis, along with quantitative and sentiment analysis, gives investors a full view of stocks272829.
Conclusion
Mastering the stock market takes patience, discipline, and a commitment to learning. By understanding the stock market basics and improving your financial knowledge, you can tackle the financial world with confidence. This guide has given you the tools and strategies to start a successful investment journey in the stock market30.
Learning, adapting to market changes, and staying disciplined are crucial for your growth and success in stock market investing31. The stock market’s growth, seen in the S&P 500, Dow Jones, and Nasdaq, shows the need to stay informed and flexible with your investments. The drop in Treasury yields and the rise in the Cboe Volatility Index highlight the importance of being adaptable31.
By mastering the stock market, you can reach financial success and meet your investment goals. This could mean building wealth, diversifying your portfolio, or investing in companies you believe in3230. Lessons from past market crashes, like in 1929 and 2008, remind us of the need for careful risk management. They also show how central banks must balance their actions to avoid market bubbles30.
FAQ
What is the stock market and how does it work?
The stock market lets people buy and sell shares of companies. These shares mean you own a part of the company. You can trade them on places like the New York Stock Exchange (NYSE) or the NASDAQ.
Why is financial literacy important when investing in the stock market?
Knowing about money matters like budgeting and investing is key. It helps you make smart choices and handle the financial world better, especially with stocks.
What are the benefits of investing in the stock market?
Investing in stocks can grow your wealth over time. It also helps spread out your investments and lets you be part of a company’s success.
What are some key risk management strategies for the stock market?
Managing risks in stocks means diversifying your investments and setting clear goals. Spread your money across different areas to lessen the risk of one investment doing badly.
How can I develop an effective investment strategy for the stock market?
Create a strategy that fits your risk level and goals. You might focus on safe stocks or look for companies with growth potential. This depends on what you want and your investment goals.
Why is it important to conduct thorough research before investing in the stock market?
Doing your homework on stocks helps you make smart choices. Look at financial reports, check company performance, and keep up with market trends. This can lead to better investment decisions.
How can emotions impact investment decisions in the stock market?
Feelings like fear or greed can lead to bad investment choices. Being aware of your emotions and staying disciplined can help you avoid these pitfalls and stick to your investment plans.
What are the different trading styles in the stock market?
There are various trading styles based on how much risk you can take and your goals. These include day trading, swing trading, and long-term investing, each with its own way of working.
How do I choose the right brokerage platform for my stock market investments?
Picking the right platform is key for investing in stocks. Think about what it offers, its fees, and if it matches your trading style. Whether you’re into day trading or long-term investing, find a platform that fits you.
What is the process for opening and funding a brokerage account?
Opening and funding a brokerage account means giving personal info, picking the right account type, applying, and then adding money. You can do this through bank transfer, wire transfer, or check.
What are the main approaches to stock market analysis?
Analyzing the stock market uses both fundamental and technical methods. Fundamental looks at a company’s finances and future growth. Technical analysis studies past data to spot trends and patterns.
Source Links
- Stocks and the Stock Market- A Beginner’s Guide-Part 1 – https://www.linkedin.com/pulse/stocks-stock-market-beginners-guide-part-1-reshma-rajan-w0yrc
- What Is the Stock Market and How Does it Work? – https://www.investopedia.com/terms/s/stockmarket.asp
- How Does the Stock Market Work? – https://www.investopedia.com/articles/investing/082614/how-stock-market-works.asp
- Stock Market Basics: What Beginner Investors Should Know – NerdWallet – https://www.nerdwallet.com/article/investing/stock-market-basics-everything-beginner-investors-know
- Financial Literacy: What It Is, and Why It Is So Important To Teach Teens – https://www.investopedia.com/terms/f/financial-literacy.asp
- Key Benefits of Investing In Stocks – https://www6.royalbank.com/en/di/hubs/investing-academy/chapter/key-benefits-of-investing-in-stocks/jv7atg13/jv7atg1j
- Risk Management Techniques for Active Traders – https://www.investopedia.com/articles/trading/09/risk-management.asp
- Common Risk Management Strategies for Traders – https://www.investopedia.com/ask/answers/050715/what-are-some-examples-risk-management-techniques.asp
- 5 Key Investment Strategies to Learn Before Trading – https://www.investopedia.com/investing/investing-strategies/
- 5 Popular Investment Strategies For Beginners | Bankrate – https://www.bankrate.com/investing/investment-strategies-for-beginners/
- Investment Strategies for New Investors – NerdWallet – https://www.nerdwallet.com/article/investing/investment-strategies
- Stock Research: How to Do Your Due Diligence in 4 Steps – NerdWallet – https://www.nerdwallet.com/article/investing/how-to-research-stocks
- How to Become Your Own Stock Analyst – https://www.investopedia.com/articles/basics/09/become-your-own-stock-analyst.asp
- How to research stocks | Fidelity Investments – https://www.fidelity.com/viewpoints/active-investor/how-to-research-stocks
- Understanding the emotions of investing – https://www.edwardjones.ca/ca-en/market-news-insights/personal-finance/investing-strategies/emotional-investing
- The psychology of money and emotion | Vanguard – https://investor.vanguard.com/investor-resources-education/article/the-science-behind-money-and-emotion
- How to Avoid Emotional Investing – https://www.investopedia.com/articles/basics/10/how-to-avoid-emotional-investing.asp
- 4 Common Active Trading Strategies – https://www.investopedia.com/articles/active-trading/11/four-types-of-active-traders.asp
- Day Trading vs. Swing Trading: What’s the Difference? – https://www.investopedia.com/articles/active-trading/052815/pros-cons-day-trading-vs-swing-trading.asp
- A Deep Dive into Different Trading Styles in the Stock Market – https://www.linkedin.com/pulse/deep-dive-different-trading-styles-stock-market-samson-thomas-safnf
- How to Pick a Stockbroker – https://www.investopedia.com/articles/younginvestors/06/firstbroker.asp
- How to Choose an Online Stock Broker – https://www.investopedia.com/investing/complete-guide-choosing-online-stock-broker/
- How to Choose the Right Brokerage Firm for You | The Motley Fool – https://www.fool.com/the-ascent/buying-stocks/how-to-choose-an-online-brokerage/
- 5 steps to open an investment account – https://fortune.com/recommends/investing/how-to-open-an-investment-account/
- How To Open an Online Brokerage Account in 2024 – https://www.investopedia.com/how-to-open-an-online-brokerage-account-4588908
- Everything you need to know about setting up your first brokerage account – https://www.cnbc.com/select/how-to-open-first-brokerage-account/
- Fundamental vs. Technical Analysis: What’s the Difference? – https://www.investopedia.com/ask/answers/difference-between-fundamental-and-technical-analysis/
- Stock Analysis: Different Methods for Evaluating Stocks – https://www.investopedia.com/terms/s/stock-analysis.asp
- How to Pick Stocks: Fundamentals vs. Technicals – https://www.schwab.com/learn/story/how-to-pick-stocks-using-fundamental-and-technical-analysis
- Stock Market Crash of 1929 – https://www.federalreservehistory.org/essays/stock-market-crash-of-1929
- Closing Market Update – https://www.schwab.com/learn/story/stock-market-update-close
- 4 Ways to Predict Market Performance – https://www.investopedia.com/articles/07/mean_reversion_martingale.asp