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The Wise Investor

5.2 Stock market
John's voice was barely a whisper now, but he
continued speaking.
"The time has come," he said, "to talk about the
stock market in detail."
Kate grimaced. She had not been looking
forward to this. Ever since John had identified the
three major sectors as property, shares, and
interest-bearing investments, Kate had been
dreading the discussion on shares.
She could understand a bank account, and there
was nothing complicated about a term deposit.
Property, too, was not too daunting, as she had
bought her own home already, and the concept of
buying a house as an investment seemed
Shares, however, were a mystery to her. She
had always relegated the share market to the same
category as mythical flying beasts and fairy stories,
a place where spectacular profits and losses were
made, and only the brave or foolish dared to tread.
A place of mystery and intrigue, and a place best
left well alone. She knew, however, that John would
be the last person to accept this view, so she gritted
her teeth and remained silent.
"On the whole," John said as his voice regained
some strength, "the public has a very poor
understanding of shares and the stock market. This
is sad, as it is actually very simple in concept, and
properly used will return good profits with high
security. Let me dispel a few of the myths about
shares for you Kate. First, the stock market is not
just for the wealthy. In fact, it is far simpler for the
ordinary person to invest in shares than it is for them
to invest in property. If you saved one month's