What is the stock market? This is officially the first video in this course, which will cover the very basics of what the stock market is and the strategies it uses in investing and trading.
So what is the stock market?
The stock market is a global market where companies go public to raise more money. The term goes public means opening the company to the average investor you and me by listing it on a stock exchange like the Dow Jones or the Nasdaq. Publicly listing a company allows more people to invest money into the company. These exchanges are often used as a way to indicate and measure the overall health of the market and to predict the world’s economy. They include several companies’ stocks that investors can buy and buy.
Part of the company means that the investor buys a share, which is just a different way of saying owning stock in the company or owning a portion of the company. The term shareholders is a name given to investors who buy a share or multiple shares of a certain stock. Most companies allow their shareholders, the people who buy their stock to vote in certain elections pertaining to the stock price of the company. Generally, companies either allow shareholders to have one vote per investor or have one vote per share
they own. So either the say in the company, i.e. how much their voice is heard via their vote is equal or the more shares they own, the bigger the say in the company. So in this pie chart over here, the chocolate chip cookie industry company has a few investors, a.k.a. shareholders. The chocolate chip cookie industry owns 250 shares of the company, as seen here. Samantha owns 100 shares, Romeo owns five hundred shares, and you own a thousand shares. You own the majority of the company, which is not usually the case. But let’s just say it is. In total, there are one thousand eight hundred fifty shares.
If the chocolate chip cookie industry allows every shareholder to have only one vote each, then each shareholder has the same amount of, say, in the company’s elections. So Samantha would have the same amount of influence on the company selections that you and Romeo do. If the chocolate chip cookie industry allows every shareholder to have a vote for every share they own. You have the most say in the company’s elections because you own the most shares, which means you own the majority of the company. In this case, you were the majority shareholder. Usually, the company’s founders, founders, a majority shareholder, and some companies don’t have majority shareholders. So why buy a stock? People buy the stock at companies for many reasons, some of them being good news or a bright future.
What you see here is a chart of stock.
In this case, the stock doesn’t matter because we’re only talking about hypothetical situations. If you just look at the patterns of the chart, you notice it’s not a perfectly straight line going up or down. That’s because investors buy or sell the stock based on the reasons I’ve mentioned before and others, which all affect the faith of the investor.
Faith in the company is important to investors because no one wants to buy a company that they think will decline and will cause them to lose money. It’s like buying a car that you think will break in six months. No one does that because it’s a terrible investment and you lose money. In this chart, there are sharp inclines and declines, but you notice that overall the stock is higher at the end point than it was beginning.
One of the reasons this could be and what the reason would be for the traditional investor is that investors see a brighter future for the company and have faith that it will generate money over the course of time.
Now, stock prices increase and decrease due to supply and demand.
What times Does the stock market open.
The more shares people buy, the less available shares there are to buy, driving the price up higher. It’s like anything in the real world. Let’s say a supermarket is selling potatoes, right? So Mary sees that the potatoes are worth $5 each, which is a price she is willing to pay for them. If Mary buys two of the three potatoes being sold, Marc Ryan, and Stephanie all want to buy a potato, and they will all fight or bid for the potato, and the person that is willing to pay the most for it will get the potato.
So selling is kind of the opposite. Let’s say Mary Realized realized that she only needs one potato for dinner that weekend. So she goes back and adds another potato to the bit unless Mark or Ryan or Stephanie wants to add two potatoes. The price of one potato will drop because there are more potatoes to buy, which means there is less of demand.
This is exactly what happens when people sell their shares.
They return the shares back into the market, driving the price down low enough for investors to feel comfortable and buy up a note. For every seller, there is a buyer. That is why it is called trading shares.