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How Does The Stock Market Work For Me?
By Samantha Asher
Try turning on the news or opening up a newspaper. You'll probably read or hear something about the market. I'm sure you've heard about stocks making a lot of people money and about people going broke buying stocks, but just how does the market work?
Don't worry, the market isn't that hard to understand. First let's discuss a market. A market is where goods and/or services are bought and sold. Think of a supermarket. At the local supermarket, food and other goods are bought and sold.
In the market, stocks are bought and sold, instead of food. When you own stock, you own part of a company, this is referred to as equity. When you own in a corporation, you have equity in that corporation.
Stocks are bought and sold on exchanges such as the New York Exchange. The NYSE is one of the most common exchanges, but there are exchanges all over the world where stocks are bought and sold.
If
you want to make money from stocks, you need to follow a simple process. First, you buy the of a corporation at a specific price. Then, when the price has gone up, you sell it. The difference is the profit you gain.
To further explain it, think about ebay. It works just the same because it is also a market. If you buy a bike at a garage sale for $20 and then sell it on ebay for $75, you have made a $55 profit.
You don't have to physically go and find someone to sell you or find someone to sell it to. When you have a brokerage account, you just tell your broker what you want to buy or sell and they use the exchange to find the buyer or seller.
This is basically how the market works. It's not too complicated. Just make sure you buy low and sell high. This is how you make profit. Do this at least most of the time and you will consistently come out ahead. Keep investing and you will make more money.
Just how does the stock market work? Learn more about the stock market and learn how to buy stocks to start making your money grow. |
