The Stock Market, What Exactly Is It? PDF Print E-mail
Written by Shaun Rosenberg   
Sunday, 20 June 2010 18:04
The stock market is a place where stock buyers and stock sellers come together to create transactions. Anyone can participate in the stock market by opening up a brokerage account and placing orders.
by ShaunRosenberg


The stock market is a place where stock buyers and stock sellers come together to create transactions. Anyone can participate in the stock market by opening up a brokerage account and placing orders.

Brokers match orders as they come in. If you want to buy a stock and place a trade the broker is responsible for finding a selling to sell you that stock and therefore allow you to get into that position easily. It might sound like it will take a while, but because stocks are so liquid the process only takes a few seconds.

So, now you know that the market is basically a place where you can buy and sell stocks. But what exactly is a stock?

A stock is basically a small percentage of the company. If a company consists of 50 million shares and you buy 1 share you effectively own 1/50 millionth of the company.

Now with such a small percentage of the ownership of the company you will not have a lot of power in the company. You can't make the big decisions, but there is another advantage of owning stock in a specific company.

Stock by itself is worth something. Since each share represents a portion of the company they are backed by the company itself. As long as the company is still around your stock should be worth something and as the company grows and prospers your stock should be worth more and more.

If you buy stocks in strong companies and hold onto it as they continue to grow your stock will continue to grow over time and eventually your investment has the possibility to grow into something very big over time.

Owning stock is a fantastic way of building your wealth. This is proven by the fact that the majority of millionaires by stock and hold onto them. If you have some money saved up and are looking to invest it the stock market is a terrific place to do that.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

If you are learning about stocks and still have questions please ask them on this stock market questions and answers page. You are welcome to reprint this article - but get your own unique content version here.