Intro to the Stock Market

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What is the stock market?

• A virtual place where you buy and sell publicly traded shares of companies

What is stock?

Stock is part ownership in a company. So if you own shares of Apple then you are part owner of Apple.

How do you make money in the stock market?

You make money in the stock market by 1) Buying low and selling high and 2) Earn dividends

Dividends

When a company makes money they share that profit with their stockholders. This money is called dividends.

Stock Exchange

• The place where stocks are listed

• NYSE & Nasdaq are examples

• All stock exchanges combine to make the stock market

How do you buy stock?

• You must be 18

• You must use a licensed broker/brokerage

• You can now buy with an app

Pros and Cons of investing in stocks

• Potential to earn more money than a savings account

• Averaged 10% per year vs. 1% at bank

• Inflation has averaged 2.4%

• Can lose all your money if company goes out of business

• Can lose money when you need it (i.e. Pandemic)