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