the stock market

investing for beginners

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what's in this lesson?

So, what is the stock market anyway? Let’s first talk fundamentals, since those are what often get skipped when people are trying to show you how to make a few bucks. They’re key to knowing how to get started!

the stock market

investing for beginners

So, what is the stock market anyway? Let’s first talk fundamentals, since those are what often get skipped when people are trying to show you how to make a few bucks. They’re key to knowing how to get started!

what's in this lesson?

So, what is the stock market anyway? Let’s first talk fundamentals, since those are what often get skipped when people are trying to show you how to make a few bucks. They’re key to knowing how to get started!

overview

What is the stock market?
The stock market is a place where investors gather to buy and sell ownership shares of public companies.

What are public companies?
Public companies are companies that–you guessed it–are owned by the public. Unlike the local shop down the street from you, which is likely owned by an individual or a group of individuals, public companies have listed themselves on a stock exchange that allows ownership “shares” of that company to be bought and sold by the public.

What is stock ownership?
What does ownership mean, and what does it get you? So this is pretty crazy to think about, but when you buy a stock you’re literally a part owner of that company. So you get entitled to your share of the profits if the company looks to distribute them (dividends). You also get sent investor materials about company strategy and sometimes the right to vote on certain company decisions (though your ownership share likely won’t be significant enough for your vote to make a difference).

Your ownership of a company is counted in shares–for example, you might own 10 shares of Apple…out of the millions of Apple shares out there! Pretty cool–and potentially valuable if Apple stock continues to grow.

What is the stock exchange?
So…there are all these investors and they’re all buying and selling shares of public companies–where does this happen? It happens on an exchange, which is essentially the stock marketplace. You may have heard of the New York Stock Exchange or the NASDAQ…those are exchanges where you can buy and sell shares of companies that are listed on them.

The stock exchanges are a chaotic place–millions of shares of companies are bought and sold every hour, prices are going up and down reacting to company news and world events. And you can watch it live on your computer, taking part in the market through “trading”–the practice of buying and selling shares.

When you look at a stock ticker or one of those crazy shots of Bloomberg, what you’re seeing is a rundown of publicly traded companies and how their prices have changed over the course of the day, usually expressed as a percentage.

That was a lot–and you may have already been familiar with much of it–but its key to understanding the next bit. How are the prices of shares determined? Get the answer in the next lesson.

 

Source(s): Investor.gov

overview

What is the stock market?
The stock market is a place where investors gather to buy and sell ownership shares of public companies.

What are public companies?
Public companies are companies that–you guessed it–are owned by the public. Unlike the local shop down the street from you, which is likely owned by an individual or a group of individuals, public companies have listed themselves on a stock exchange that allows ownership “shares” of that company to be bought and sold by the public.

What is stock ownership?
What does ownership mean, and what does it get you? So this is pretty crazy to think about, but when you buy a stock you’re literally a part owner of that company. So you get entitled to your share of the profits if the company looks to distribute them (dividends). You also get sent investor materials about company strategy and sometimes the right to vote on certain company decisions (though your ownership share likely won’t be significant enough for your vote to make a difference).

Your ownership of a company is counted in shares–for example, you might own 10 shares of Apple…out of the millions of Apple shares out there! Pretty cool–and potentially valuable if Apple stock continues to grow.

What is the stock exchange?
So…there are all these investors and they’re all buying and selling shares of public companies–where does this happen? It happens on an exchange, which is essentially the stock marketplace. You may have heard of the New York Stock Exchange or the NASDAQ…those are exchanges where you can buy and sell shares of companies that are listed on them.

The stock exchanges are a chaotic place–millions of shares of companies are bought and sold every hour, prices are going up and down reacting to company news and world events. And you can watch it live on your computer, taking part in the market through “trading”–the practice of buying and selling shares.

When you look at a stock ticker or one of those crazy shots of Bloomberg, what you’re seeing is a rundown of publicly traded companies and how their prices have changed over the course of the day, usually expressed as a percentage.

That was a lot–and you may have already been familiar with much of it–but its key to understanding the next bit. How are the prices of shares determined? Get the answer in the next lesson.

 

Source(s): Investor.gov

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