Joseph Uglietto has been following the stock market since he was a young boy. While most kids were trading Pokemon cards, Joseph was watching stock market movements.
He was really fascinated by everything about the stock market, trying to understand what it was all about and what made a particular stock price go up one day and then down another. While it confused him at first, once he took the time to learn what the different terms meant, he was definitely hooked.
Joseph Uglietto thinks everyone, whether you are investing money into stocks or not, should have a basic understanding of the stock market, how it works and how it plays a role in our the economy. That is why he has added some stock market basics below. He hopes that this will help you appreciate the stock market and who knows, maybe you will invest in some stock when you’re done.
What are stock shares?
Stock shares are units or pieces of a company that you own. The more stock shares you buy, the more of the company you own
Why would a company sell stocks?
A company sells stocks so they can make money to help better their company or product. Some reasons may be to:
- Hire more employees
- Do more research & development
- Improve their product
- Make more products
What is the Stock Market?
Simply put, a stock marketplace where stocks and bonds are bought and sold.
How Does the Stock Market Work?
You buy stock shares in a company at a set price (hopefully low) and then you wait and watch the price of that stock over time. The goal is to obviously buy low and sell high, but unfortunately, it is a gamble, because if the stock rises in price you make money, and if it falls in price, you lose money.
How Does the Stock Market Affect our Economy?
- It allows people like you and me to have a chance to invest in a company that we would not normally get to be a part of.
- If successful, it allows corporations to gain an edge over their competition. The more money (capital) they make, the more money that gets spent.
- The more people invest in listed companies, the better because it indicates that investors believe in these companies and that means financial growth for our country.
There is a lot more to the stock market and how it works, but the above are the basics. If you would like to learn more, visit The Balance.