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Here are a few basics:
There are two basic trading strategies, active and passive. Active trading is buying/selling stock which you think is going to go up/down from information you have. Passive trading is buying a stock you think will go up in the long term and sitting on it. This is also called taking a "long" position (buying and holding). A "short" position means you intend to sell an asset, which could be borrowed (short selling).
You realise gain on equity (stock) in either of 2 ways. Dividends (or income) are paid by a company and are announced as an amount per share. The other way is capital gain, which happens when you take a long position, and then sell it some time in the future when the price is higher.
Stock prices are a consensus value on what everybody in the market thinks a company is worth at a given moment. When new information becomes available, the stock price will change to reflect how good/bad that news is, if it is relevant to the firm's operations. This happens very quickly.
Diversification means holding assets in a variety of classes so that bad news in one sector will have a minimal effect on your overall portfolio. Your portfolio should be some mix of equity, land, bonds, and commodities depending on your risk tolerance (a financial advisor can figure this out for you, but as somebody mentioned, they sometimes have perverse incentives from commissions, or they could just be bad wealth managers. Shop around.)
Financial markets are zero sum games meaning if somebody gains, somebody loses. Remember this when buying any stock, chances are the other party has the ability to process a lot more information than you can. I can't emphasise this enough. A lot of traders on the market are quite sophisticated in the amount of information they can process.
More than that, just try to keep in mind that the stock market is not some magical money making machine. It's a place where people can come together and trade company stock at a price they think is fair. Your portfolio should be a store of your wealth, and be spread around a lot (equity, bonds, land and commodities for example) so as to minimise the effect of bad news. Yes the global financial crises screwed everybody over, that is what is called systemic risk, ie risk that cannot be diversified away. Hope that helps!
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How do I do my own DD (Due Diligence) to make an educated decision about buying a stock?
DD is helpful to you in that it can allow you to gauge how a company's stock may perform in the coming weeks, months, years. DD involves learning about a company - what it does, what it is going to do in the future, what it's financials are like, what are some potential catalysts that may move the stock up or down. Financial documents can take some learning on how to read to get useful information out of them, but remember that Google is your friend. Some of the resources I use are:
The company's website - usually there is a lot of information pertaining to what the company does and where it's going in the future. There should also be an easy to find Investor section which will contain press releases, financial forms, earnings releases and conference calls.
Earnings data - Can be obtained from the company's website as said above, and your broker will usually have data related to past earnings results available when you research a stock.
Google - I search Google news for news associated with the company.
Websites - Like Seeking Alpha, Motley Fool, Yahoo Message Boards, MartketWatch, Finviz, etc. Though anything you read on the first three should be taken with a grain of salt.
While I am not a fan of William Ackamn, his video taught me everything to get started: https://www.youtube.com/watch?v=WEDIj9JBTC8
Its very well done with good supporting graphics to make it easy to understand.
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