Stock Market
The Stock Market is the market for trading company stock. Stock is the value per share in the money that a business obtains from its owners. Owners invest money into the business. The company uses this money to generate sales and earn profits. Since stockholders own parts of a company, or shares, they share in the success or failure of a company.
If you decide to purchase shares in a company and then sell them, you assume all responsibility of loss and do not gain if the company then has major success, because you are no longer an owner of shares. The person you sold to is now profiting from the increase. With stocks, companies have no legal obligation to pay dividends to its stockholders.
Dividends are monies paid out when the company profits. However, most companies like to keep their shareholders happy, and readily pay out the dividends if the corporation's after-tax profits are enough for them to do so. Most people will use their dividends to buy more stock.
Many people buy and sell stocks because there are larger returns to be made than on more conservative investments. This requires active monitoring and knowledge. When you buy stock, you hold onto it for a period of time. If the value increases, you may sell it at a higher price than what you bought it for (therefore gaining a profit), or hold onto the stock and hope for even bigger gains down the road.
continue to Stock Market Part 2