Stock market?

Question

I need a n explanation on what is the stock market, who does it help, what does it entails, why and how does it goes up or down, what is it? That the world depends so much on it? Is only paper that we [humans] print ourselves,who controls it? thank yous.

Answer 1

It's like a Wal-Mart except you buy companies instead of apples and oranges.

It helps you keep your job (Unless you work for the Government)

Because sometimes somebody sells and sometimes somebody buys.

Let's suppose a bunch of brilliant scientist invent a vaccine for Cancer.

They get a patent.

They need hundreds of millions of dollars to produce enough vaccines to sell to billions of people.

They don't have enough money.

They cannot go to a bank and ask for a $100,000,000.00 USD loan.

They SELL A SMALL PART OF THEIR COMPANY to you and me.

If they convince 1,000,000 investors from around the Globe to invest just $100.00 USD then they can actually build the factory to make the vaccines.

The Stock Market is where the scientist meet the investors and raise the money they need for their factory.

It's not exactly rocket science.

In fact, Merck has REALLY INVENTED A CERVICAL CANCER VACCINE. It's called Gardasil.

Billions of people from all over the World invested as little as $43.00 USD in Merck several years ago.

It was worth it.

Eventually they will discover vaccines for other types of Cancer.

As long as billions of people from all over the World keep buying their shares, of course.

I strongly suggest you to open a brokerage account at Scottrade with as little as $500.00 USD and invest your money in a few companies.

We really need to discover a cure for AIDS, send a rocket to Mars, build Hotels in the Moon, build a 500 MPG car and of course a Three Dimensional Television.

Those things are expensive to build, you know.

Nobody can do it on their own (Not even Carlos Slim)
Only with cooperation (And money) from billions we can make those things and others.

Answer 2

When a business becomes big and wants to expand it needs money. One place they can get money is the stock market. There are two markets primary and secondary. The company first goes to the primary market, here they offer their shares to big institutional buyers via investment banks. The trade is done in miillions of shares. The company has a choice of being listed in the secondary markets mainly NYSE, AMEX and NASDAQ. The secondary markets offer liquidity to investors. The company does not play a role in the secondary market.
When there are more buyers then sellers the price of a stock goes up and vice versa.
Companies depend on the market to raise money, investors to raise their capital.
Everybody controls the markets, its mostly by institutional players but individual buyers are at heart.

Answer 3

there are a lot of complicated questions here. it will take too long to answer. briefly, the stock market is made up of exchanges where individual stocks trade. stock is ownership of a company. people invest in companies, funds (a group of companies), indexes, and many other things. they do this to build wealth, make a living. or just make money. people loose money as well.

it is big business all over the world.

Answer 4

Let's look at Target. They have a little under 1,500 stores that took in something above $52 billion. The company has something like $35 billion in assets (the money you work with) and about $18 billion in debt (short and long term), which does stuff like buying merchandise on credit or finances buildings. Who owns all this? Folks like your pension fund, maybe one of your neighbors, possibly the rich folks in town, maybe some insurance companies--it is widely held, there are over 800 million equal shares of ownership out in circulation, held by tens of thousands of individuals, rich and middle class, and companies. Lots of folks like to buy stuff at the stores and the company does that at a profit. Last year the company even paid the stockholders 44 cents for each share, a piece of that profit paid out to the owners of the company. If you owned a hundred shares (TGT, would cost about $5,800--ish today) when they announced the dividend cut off, they would have sent you a check for $44. If the mutual fund that holds your retirement money had 100,000 shares, Target would have sent them $44,000.

Meanwhile, people go looking for places to put their extra money. There are people who look for retirement money. There are people who look for fluctuations in prices, so they make money by trading the stock. If news is good, then the second group buys shares thinking that the first group would want it--and they sell it at a profit, a higher price. Too few are buying today, then the interest is over from the last set of news, so the speculators, the second group, dumps their shares as they await the next opportunity among literally thousands of other companies. The lack of interest means that fewer people are willing to pay the previous prices. Just like watching cars on the streets, there are people on the north side of town go to the south side and people on the south side going to the north side, then each turn around and go back home after they've done whatever they were doing, people are putting money into companies like Target or selling it to put somewhere else or pay some bills or just because they feel like it. Folks somewhere are wanting to buy. Folks somewhere are wanting to sell. Folks somewhere are trying to figure out the whats and whys of patterns in traffic for buying or selling the stock--so they can make money buying from or selling to someone.

As for controls, there are people who watch, the top layer of regulators are agencies like the Securities and Exchange Commission, as well as tax agencies like the IRS. Then there are the Secretaries of State and Attorneys-General of the various states, plus their departments of revenue. There are industry watchdog groups that try to make sure that they don't cheat consumers or practice their business and its accounting fairly to the other companies that do the same. There are the investment houses, institutional investors like mutual funds and insurance companies that sock away their customer's money until they call for it in the future. Target is a good company and we know that not just because of what Target says, but because all of these others watching either agree or don't complain much. Companies like Enron, however, tried to cheat the system--and they eventually got caught.

In a way it is simple. In many ways it is very complicated, like counting birds in your neighborhood at any given moment. But it is a system that works pretty well and has for a long, long time.

Answer 5

Check out the Stock Market section at http://www.sellchamp.com

They offer free helpful tips.