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