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