Can someone explain to me in layman's terms how buying and selling stock works?

Question

I understand you buy stock and then the corporation uses that to advance their business or whatever...and then returns whatever profits or lack thereof. What I don't understand is at the end of the year when they made profit/loss do they automatically pay you the money or do you have the option of keeping the stock and selling it at a later date?

Answer 1

IPO - Initial Public Offering.
>>The company sells the stock to you. The company uses this money for its stated purposes.

All other Stock Purchases
>>You are simply buying and selling from other people who own or want to sell. The company does see that money.


Dividend
>>Usually quarterly. Some companies offer them and some do not. This is profit that the company wants to distribute back to the shareholders (owners of company). They can, for example, give $1 per share. If you own 100 shares, you get a check for $100.

You can choose to buy/sell your stock whenever you want (for the most part). Keep it for 1 day or 20 years.
The hope is that the price of a share increases. If it increased, the value of your holdings increase, and vice versa.
**You only realize a gain or loss when you sell your stock. Until then, you have a 'imaginary' gain/loss on paper.
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Answer 2

Companies offer for sale the ownership of a portion of their company. That portion is represented by the stock. The stock can be 50% ownership in the company or a small portion of the company such a one millionth of the company. In the stock market people speculate whether the value of their share of the company will go up and down by buying and selling their portion of the company (the stocks).

Answer 3

The Dow Jones is an index, which in simple terms skill that it incredibly is a team of commercial agencies (agencies THAT MAKE STUFF) and the huge type is how plenty their inventory costs upload as much as. conventional & poor's have an index of 500 agencies spoke of as the S&P 500 it incredibly is a tremendously good benchmark for a fashion the industry is doing additionally. NASDAQ is a paying for and advertising midsection for generally technologies & provider agencies based in Chicago, as adversarial to the manhattan inventory substitute (NYSE) that's on Wall highway in manhattan city.What inventory is would desire to be a greater effective question. it incredibly is a proportion, or a proportion of the full fee of a enterprise. the upward thrust or fall of the inventory fee is a transformation contained in the perceived money fee of that enterprise.

Answer 4

hey that a good question