| Standing far back and looking out on to the stock | | | | voting and attending stockholder meetings. The |
| market one will see a very complicated world | | | | more shares you own the greater say you have. |
| with a lot of seemingly scary numbers that | | | | The reason people buy shares in companies is so |
| constantly run back and forwards. Looking closer, | | | | they can make money. As a part owner the |
| though, the stock market becomes a lot more | | | | investor makes money when the company |
| clear and it is seen that it really isn't that difficult | | | | makes money. The money the investor earns |
| to understand after all. | | | | comes to form in several ways. |
| The stock market is just that. A market where | | | | Firstly let's look back at the company that the |
| one can purchase or sell stocks. To understand | | | | share is in. That company will earn a certain |
| the stock market, therefore, is not much | | | | amount of money in a given period of time. That |
| different than understanding a fish market. The | | | | money has to be used to pay for its operating |
| more people want them, the more they cost. | | | | costs, paying salaries and the like. Whatever |
| They less people want them, the less t hey cost. | | | | money is left over from that is in one form or |
| But should you want this one or that one? Well, | | | | another distributed to its owners; or, share |
| using the fish market analogy, you can not really | | | | holders. |
| understand what to buy at that market unless | | | | Most companies pay out dividends at various |
| you understand something about fish. | | | | points throughout the year. These are chunks of |
| So before you can zero in on just what stocks to | | | | the profit being distributed to the people who own |
| buy at the stock market you must understand at | | | | the shares. If you own that one percent then you |
| least something about what the stock actually is. | | | | get one percent of the dividends. What does not |
| A stock, in another word, is a share. It is a share | | | | get paid out in dividends goes back in to the |
| of a company that wants to allow anyone in the | | | | company so that it can grow. |
| public sphere the opportunity to invest in a piece | | | | When a company is doing very well then a lot |
| of their business. | | | | more people will want to buy themselves a piece |
| A company offering shares for public trade would | | | | of it. To do this they will need to get themselves |
| no doubt offer thousands of shares, but to better | | | | a share. If there are only those hundred shares |
| understand it assume that it only offers a | | | | though, then there are not a lot to go around. |
| hundred. If you buy one share for yourself then | | | | That kicks off the effects of supply and demand |
| you own, in essence, one percent of that | | | | and, as such, the price of each share will rise. |
| company. As a one percent owner you have one | | | | If you choose that time to sell your share in the |
| percent weight over some of the more important | | | | company, you will make a profit because of that |
| decisions the company makes. This is done by | | | | rise. |