The stock market often becomes a subject in adult conversations, especially after watching the nightly news. The stock market creates a lot of buzz that keep people on their toes, but it can cause confusion for people (like kids). Surprisingly, the stock market can spark an interest in most people who take the time to understand how stocks work. A stock represents a small part of a company. People buy stocks, or invest in a small parts of a company, in hopes of making money on them. Shareholders, or people who buy stocks, make extra money when the company makes more money than previous years after subtracting their expenses. All of the stockholders share the company’s net profit.
The stock market works in the same way as a flea market. People go to the flea market to check out all of its vendors. The stock market serves as a marketplace for different companies. People can buy and sell stock from many different companies in the stock market. Each company sells its stock at different prices. Stockholders look at the stock market until they find the best prices. The stock market also gives stockholders the freedom to sell stock after it makes a profit. For instance, if someone buys a stock for one dollar and the stock value rises to ten dollars, then that person can sell it to another person for a nine dollar profit. In other words, the stockholder who bought one stock for one dollar made an extra nine dollars by selling it. Stockholders can use many financial tools and charts to see when they want to buy more stock or sell the stock they own.
Stockholders who own multiple stock can make more a lot of money if they sell a lot of stock at the same time. For instance, if a stockholder bought one hundred stocks at one dollar and sold them when the value reached ten dollars, then they would make a nine hundred-dollar profit. The stock market offers endless money-making potential for people who know how to work it correctly. Unfortunately, people can lose money in the stock market, too. For instance, if a stockholder bought one share at ten dollars and it devalues to one dollar, then the shareholder lost nine dollars. This can be a problem for stockholders who invest thousands of dollars in one company. If a stockholder bought one hundred ten-dollar stocks and then they devalued to one dollar, then the stockholder lost nine hundred dollars from their original investment.
Many people spend a large chunk of their lives trying to learn how to make the most money from the stock market. The stock market gives people the right to increase their income by investing in different stocks. People who invest in different stocks, instead of placing all of their eggs in one basket, will reap the financial awards of investing wisely in the stock market. Kids who want to start investing money in the stock market need to have a decent savings to make it worthwhile. Without the stock market, the world would struggle to stay afloat. The stock market grants investors the right to choose their stock. This freedom of choice allows buyers to invest in stock from all around the world.
Follow these links to learn more about the stock market:
| Buy & Trade Stocks | Investing Tips & Advice | 401k & IRA References |
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| Stock Market Resources | ||
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