Stock Market Basics
Written by: Anthony Bigari
The Stock Market. It’s on the mind of millions every day. It’s the indicator of the National Economy for many people, and it's also where millions of people put their retirement savings into, whether that be in a 401k or investing on the side.
What is the Stock Market?
The Stock Market is a place where investors (could be major companies, or it could be just a regular person) come to buy and sell stocks and other investments, (shares of a public company). Stocks are just pieces of a company that you can own, and they give back dividends in return for owning that company (cash payments per share of a company).
The Stock Market operates in a pretty simple way: There are exchanges, like the New York Stock Exchange, or the NASDAQ, that companies list shares of their stock (essentially a stock is ownership of a tiny piece of a company). Investors are able to buy these shares and therefore hold ownership in a company. This allows the company to raise money to have more capital in order to do more things with the company. In addition, the exchanges mentioned above allow a owner of a stock to trade their stocks with other investors. The numbers you see on exchanges are the current supply and demand values of these shares.
How do I begin to Invest on the Stock Market?
For starters, as someone under 18 years of age, you are not allowed to invest on the stock market unless you open a joint account with your parents. However, as soon as you turn 18, you can begin to invest on the stock market. I highly recommend opening up a robinhood account via a friend invite, as robinhood will grant you a free share of a stock once registered.
Here’s a video describing how robinhood has helped let younger people get into investing:
In addition, any online brokerage is a fine way to invest in the stock market. There are hundreds of different services available for different types of investors, however I would say to use robinhood as a beginner. There is no minimum price limit, and, most importantly, there are NO FEEs to trade stocks on their exchanges.
From here, all you need to do is start investing! Find stocks and companies that you think will have long (or short) term profitable gains, that will allow you to make money! The stock market is all about making informed decisions that you believe will profit in the long run, and even the best investors will sometimes lose money.
Thanks for reading!
I knew a little bit about the stock market, but this helped me understand it a lot better. I knew nothing about exchanges and that there are different ones. Is investing in the stock market a typical thing people do after they are 18? Or do they usually wait some time to see how things are going then a few years later invest? What would be the better thing to do?
ReplyDeleteWow robin hood sounds like a really cool resource to use, and its cool that it caters towards beginners as the stock market is a cool place to try to make money. How do I know which companies to invest in? Is it just intuition or is there like a algorithm that stock-brokers use to justify investments?
ReplyDeleteI really like that you talked about robinhood and gave us an example of an app that can help of learn more about investing and get better at it. Have you used robin hood before? How many companies are listed on the app? I thought that dding a video about robinhood was a cool way to get the awareness out about the app.
ReplyDeleteI found this post very intriguing to read as it is almost like a way of learning the stock market at a young age and understanding how to utilize it. Have you ever used robinhood and how does it increase your understanding of the stock market? The ways you described the robinhood program, what are other companies saying about this app? What about other individuals? Do they recommend this to people?
ReplyDeleteThe numbers you see on exchanges are the current supply and demand values of these shares.
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thanks for the information about the stock market i have been thinking about trying to get involved with it a bit. And the information that you have provided me with was a big help on how to start out. Also why do you suggest robbinhood over any of the other smaller investing apps?
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