While tracking NASDAQ and having a stock portfolio are not traditionally thought to be child’s play, getting involved with the stock market, while still a student, may not be as far-fetched as it may seem. With some basic knowledge and understanding of terms and concepts, the market becomes more accessible to a younger audience.

First off, purchasing a stock in a company is in all actuality buying partial ownership in that company. The stock owner would then have a claim on all company earnings, whether in dollars or assets.

Stocks are divided up and put into categories based on several factors; size, style and sector being the main determinants.

Size is also referred to as “market capitalization,” or how much investors think the entire company may be worth. These figures are based on current prices of the shares times the total number of shares.

The size of the stocks investors may buy is directly related to how long they intend on having money in the market.

For example, investing in a larger company whose shares may be more expensive could be a better long-term investment, as the money would gradually grow over time.

On the other hand, purchasing shares of a company whose stocks are rapidly rising may be a better short-term investment in that it could be fast cash to the buyer.

Valuation, or how a stock is evaluated on the market, is also something to keep in mind when surveying what stocks to add to a portfolio. To calculate valuation, compare the stock price and earning, also known as the P/E ratio. Divide the current price per share by earnings per share to get the P/E ratio.

The P/E ratio should not be the deciding factor for the investor on whether to buy or sell shares in a company. Instead, the P/E ratio should be used as a supplement to whatever may be known of the company already to see whether shares are overvalued or undervalued.

A key factor in getting involved in the stock market is investing within a comfort range that varies from person to person. Higher risk investments may bring a higher dividend, but also can call for a greater loss should the economy falter in a certain industry.

Looking at the stock prices enables the public to track the earnings of a company, roughly. Over the short-term, stock prices see a rise and fall due to news from that corporation or rumors. Over the long term, the actual earnings of the company can be followed and charted more accurately.

Individual stocks do not reflect the market on the whole, a misconception that some students find themselves believing is true.

Some students are dissuaded from investing due to lack of information.

“[Investing] is not really my thing,” said Jennifer Beaudry, a sophomore cardiopulmonary science major. “I’m not exposed to it enough to want to do it.”

The price of a stock also does not justify whether or not it is classified as “expensive” or not. Based on the company’s earnings, a $150 investment may be cheap if the future of the company looks promising, whereas a $3 investment may be less cost-effective.

Other factors, recommended by Money101 (www.money.cnn.com) to take into consideration when getting involved with the stock market are the cash flow, the revenue and the earnings of the company. These help the buyer to be able to draw a rough picture of the corporation’s performance overall. Also, by comparing the performance of the company with the expectations of the specific industry, the investor is able to see how efficient the company is.

Money 101 also suggests holding stocks in various industries to create a safety net for the investor. That way, if the economy slumps in a certain industry, shareholders would have something to fall back on and their money could potentially be more secure.

Investing funds in the stock market at an earlier age is something not only feasible, but can be a smart move.

“One of my friends invested from a young age and she’s doing really well,” said Rebecca Murphy, a sophomore biology major.

Getting involved at a younger age just helps savings grow, helping the student in the long run with finances and future investments.

The market in 5 pieces -Micro-cap $500 Million -Small-cap $500 Million – $2 Billion -Mid-cap $2 Billion – $10 Billion -Large-cap $10 Billion – $100 Billion -Mega-cap over $100 Billion from Money101 (www.money.cnn.com)