What is the Stock Market and How Does it Work?
By D Wood
May 3, 2012
We all hear news about the stock market everyday, we all know whether it is up or down, whether it has had a good or bad day, week or month. We all know fortunes can be made, or lost on it. But how many of us truly know what it is and how it works? The development of personal computers has resulted in more and more people investing their money, from home, in the markets. If you want to become an investor, it is important, therefore, to train in the art of trading. In order to be an effectual investor, you must learn the basics of the stock market.
The very first stock market dates back to the 17th, when the Amsterdam Stock Exchange first introduced and pioneered continuous
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Stocks are the means through which companies are able to raise money. Simply put: Stocks are the shares of a company that the owners sell in order to raise capital. When you own stock, you own a part of the company. A dividend on a share is that share's portion of the company's profits. For example if the company has 10 owners, and it makes a profit of $100,000 in the year, each owner would receive $10,000. The dividends are usually paid yearly.
The value of the share (or stock) will go up or down depending on how the value of the company fluctuates. However, if the stocks go below what you paid for them, you will not loose money unless you sell your stocks at that price. You may well recover from the paper losses when (and if) the value of the stock rebounds. However, always keep in mind that stocks do NOT offer a guaranteed return. You must choose them carefully. It is important to have a certain level of knowledge.
The companies that wish to sell shares must be publicly held. This means they must allow investors (people like you and me) to buy their stocks through an open market. The stock market is that open market. There are two main reasons for a company to want to sell shares. It is the way for a company to raise capital (money) in order to achieve its objectives, such as expansions and improvements, without having to borrow the money. Shares may also be sold when the owners want to reduce their holdings in the company and generate cash
The United States signaled a new era after the end of World War I. It was an era of hopefulness when many people invested their money that was under the mattresses at home or in the bank into the stock market. People migrated to the prosperous cities with the hopes of finding much better life. In the 1920s, the stock market reputation did not appear to be a risky investment, until 1929.First noticeable in 1925, the stock market prices began to rise as more people invested their money. During 1925 and 1926, the stock prices vacillated but in 1927, it had an upward trend. The stock market boom had started by 1928. The stock market was no longer a long-term investment because the boom changed the investor’s way of thinking (“The Stock Market Crash of 1929”). The Stock Market Crash of 1929 was a mass hysteria because of people investing without any prior knowledge and the after effects that eventually led to the Great Depression.
January 4th, 1898 was when the stock market was started. Everyone wanted to own part of a business. The way it worked was that the more stock you bought of one company. The more of a owner of that business you were. If that company were to become popular, than the price would go up because more people would want to be apart of owning that business. A bond is a lot different than stocks, Bonds are basically loans. At first the Stock market was conceived as a risky investment, but over time it became stronger and people started to trust it more and more. Pretty soon the New York Stock Exchange was booming with business. When more people started investing the price of stocks started to begin to increase. This occurred first in 1925. For the next year the price of stocks continued to go up and down. Then in 1927 they shot up.
Shares are in this manner, a declaration of responsibility for company. In this way, as a stockholder, your share benefits the company. As the company continues improving, your stocks will increment in quality.
But, if we define stock crash, it is a devaluation of stocks or shares of different industries since their price on the vary day. The devaluation of stocks may goes down from 1% to 50 %. It depends on the time and the parameters. And also we need to know what is the stock market. The Stock Market is a place of commerce where people can come and buy or sell parts of companies called "stocks" or "shares". For example, if you wanted to buy 30 shares of "Hevini Enterprise’s stock for $5.00 a share, you spend $150.00. Then you sell 20 shares to your friend Joe at $20.00 a share. That means that you make a net income of $250. This is the reason that the Stock Market is so popular with investors. This is how investors make their money. A stock is a certificate of a share of ownership in a business corporation, entitling it's owner to dividends, that i...
Despite having been around for over one hundred years, people began developing poor judgement when it came to investments in the late nineteenth century. Out of desire to participate in the ever growing popularity of the stock market, people took out large amounts of stock on an installment plan, with money they did not have. As Harry J. Carmen and Harold C. Syrett described in their publication of A History of the American People, as investing in stocks increased in popularity, “the exchange became more of a betting ring.” (Document 5) and “security prices were forced up by competitive bidding rather than by any fundamental improvement in American (business).” (Document 5). The stock market became a game, a challenge that was not fully thought through. This lead to certain businesses getting ahead of others, not due to their success, but because of the uneducated support they were getting from those who knew nothing about the businesses they were investing in, trying to get rich quick. Since those who took out stocks on installment could not pay them off, the stock market eventually collapsed all together. On October 29, 1929, the New York Times published an issue with the headline “STOCK PRICES SLUMP $14,000,000,000 IN NATION-WIDE STAMPEDE TO UNLOAD” (Document 3). Leading up to the ultimate crash, people began to see it coming and at the last second
Stock investment means you are purchasing a share of the company, therefore the company’s success determines the value of your investment. Buying stocks is not a difficult process; clarification of some important terminology and differentiation helps gives you the foundation to start investing.
What is a stock market? What is an example of a stock market? A stock market is a place where stocks or shares in a company are bought and sold. An example of a stock market is the New York Stock Exchange.
Right now, it is almost impossible for people to see how strong the international commodity markets are. Our parents and cousins and friends, everyone's ears are pinned to what goes on in the market every day of their lives. We need to start teaching more about stock market trading, and with this new expansion of knowledge, we will allow for the market to grow stronger and stronger, but at a steady pace.
Stocks are highly liquid. Most stocks trading on a major exchange can be easily bought and sold.
Stock Market Buying Strategies Investing in stocks is one of the fastest ways to grow a person’s personal wealth. When buying stock, there are multiple strategies that investors utilize; however, there are only few methods that can contribute to long-term investing. Some strategies are better than others, but having a strategy is better than having none. Buying stock takes time if you’re really wanting to boost your investments, and you have to do a profusive amount of research on the stocks you’re wanting to put your money towards.
“One of the very nice things about investing in the stock market is that you learn about all different aspects of the economy. It's your window into a very large world,” Ron Chernow once said. The stock market is undoubtedly an incredibly important economic feature, one that our modern world depends on. Indeed, the stock market is so integral to our life today that it can serve as a valuable tool where financial literacy is concerned. Two of the most important financial lessons that the stock market teaches are financial literacy terminology as well as a historical understanding of stock market institutions. The Stock Market Game simulation serves to teach these lessons in a secure environment, and
When you hear the word, stock market a distaste arises in your mouth. Most people blame the stock market and brokers to be stealers. The stock market for most people is an organization that helps the rich get richer and increase their company revenue. Stating this raises questions to things such as what causes the market to crash then and why does it affect the poor so badly. Also, most people think that the rich people in poor in the stock market get greedy causing the market to crash.
The stock market is an essential part of a free-market economy, such as America’s. This is because it provides companies the capital they need in exchange for giving away small parts of ownership in their company to investors. The stock market works by letting different companies sell stocks to gain capital, meaning they sell shares of their company through an exchange system in order to make more money. Stocks represent a small amount of ownership in a company. The more stocks a person owns, the more ownership they have of that company. Stocks also represent shares in a company, which are equal parts in which the company’s capital is divided, entitling a shareholder to a portion of the company’s profits. Lastly, all of the buying and selling of stocks happens at an exchange. An exchange is a system or market in which stocks can be bought and sold within or between countries. All of these aspects together create the stock market.
What is the stock market? Businesses share part of the company by selling stock, or shares of ownership. When investors own shares of a company, that company is considered public because the general public has an ownership stake in that company. At the high ranks of the companies are the board of directors, whose job it is to make sure the business’s managers are working in the best interests of the multiple owners and shareholders. Companies sell shares so they can expand their businesses and make them better, such as by building manufacturing plants, buying other companies, and developing new and improved products to keep their business profitable. America’s railroads, steel manufacturers, car companies, and telephone companies all started with the help of money from opening up their business to the Stock Market. The Stock Market started in the 1920’s. People who were smart enough to buy them back then could build up a fortune since the market was growing so rapidly. One wh...