why do we have stock market?

Deafilmedia

Deafilmedia

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What is the point of having a stock market?

If I sell 20 tickets... for $5 each...

Then someone invest money to me?

Increase sell?

Is Stock Market like a Horse Race?

Is that gambling?
 
There is reason behind this!

It is NOT cheap to start a business, the idea of stock shareholder began over 125 years ago by somebody who wanted to start a business but couldn't afford. So, what that means is that when a person decided to start a business and ask investors for assistance, so investors throw money in to help the business man to start business, and if profit returns, the investors "win" and collect dividends (profit sharing). If it goes out of business, investors loses money. Whats more, shareholder do have right to vote in any decision within company, usually once a year.
Get the idea?
 
My mom is a stockholder for the company she works for...man..the profit sharing she gets is so AWESOME!!!!
 
diehardbiker said:
There is reason behind this!

It is NOT cheap to start a business, the idea of stock shareholder began over 125 years ago by somebody who wanted to start a business but couldn't afford. So, what that means is that when a person decided to start a business and ask investors for assistance, so investors throw money in to help the business man to start business, and if profit returns, the investors "win" and collect dividends (profit sharing). If it goes out of business, investors loses money. Whats more, shareholder do have right to vote in any decision within company, usually once a year.
Get the idea?
Click to expand...


yes I do. Thank you.
 
Gee, diehard.

I'm terrible with economics and accounting (both of those classes I took - ugh so hard), so I have to admit - even though I am smart at English, ASL, and computers - I did learn *something* new.

Thanks.
 
Stocks mean that you're a part owner in the company:

1) If the company does well, you (usually) get dividends depending on how much of the company you own.

2) If the company looks like it'll do well, you will want to own part of the company. The more people want to buy a company, the higher the stock price goes -- you have to convince people to sell their stock, right? How do you convince someone who thinks the company will do good to sell their stock? Easy! Offer them more money for their shares!

3) A stock market is an easy way to get stock buyers and stock sellers together. Without a market, you'd have to find people on the street who own shares in the company you want to buy or sell!
"Hi, sir, do you own Apple? No? Thank you."

"Hello, Ma'am, do you own Microsoft? Yes? You want a million dollars a share?! Pfft, no way!!"

"Hi, kid, do you have Dell? What, you want to buy? I'm trying to buy! ARGH!"

"Hey, Bob, do you have AllDeaf stock? Great! I want 10 shares. I'll pay you $5 a share. What? You think it'll do better than that? Aw, okay, I'll pay you $6 a share." Then next month AllDeaf pays $50 in dividends and now everyone wants AllDeaf at $10 a share. Should I sell, and make a profit, or should I wait and get another $50?


That's the game we're talking about here.
 
Exactly, that is what is going on for the last 125 years.

Sometimes employees can get shares from their company, that is called stock options, if employer offers you(very rare), take em all! There is one small catch.... if you sold the stock, you gotta to pay back to your employer the amount it was worth when they gave to you, however if it is less, you lose nothing, if it is more than the orignal value, you keep the profit. So, you don't lose anything, you may get gain or nothing either way.
On other hand, if you got share from company stock as retirement plan, then it is whole different story.

Dennis said:
Stocks mean that you're a part owner in the company:

1) If the company does well, you (usually) get dividends depending on how much of the company you own.

2) If the company looks like it'll do well, you will want to own part of the company. The more people want to buy a company, the higher the stock price goes -- you have to convince people to sell their stock, right? How do you convince someone who thinks the company will do good to sell their stock? Easy! Offer them more money for their shares!

3) A stock market is an easy way to get stock buyers and stock sellers together. Without a market, you'd have to find people on the street who own shares in the company you want to buy or sell!
"Hi, sir, do you own Apple? No? Thank you."

"Hello, Ma'am, do you own Microsoft? Yes? You want a million dollars a share?! Pfft, no way!!"

"Hi, kid, do you have Dell? What, you want to buy? I'm trying to buy! ARGH!"

"Hey, Bob, do you have AllDeaf stock? Great! I want 10 shares. I'll pay you $5 a share. What? You think it'll do better than that? Aw, okay, I'll pay you $6 a share." Then next month AllDeaf pays $50 in dividends and now everyone wants AllDeaf at $10 a share. Should I sell, and make a profit, or should I wait and get another $50?


That's the game we're talking about here.
Click to expand...
 
So the original poster said: "Why do we have a stock market?" People have explained stocks, which is good, but the question was: "Why do we have a stock market?"

Let me try to explain. As others have said, stocks are created by companies so they can raise money. They are selling ownership in the company. So, what's the market part? Well, if I own a stock, I can sell it to anybody. I'm basically selling away my piece of the ownership of the company. Stock markets are places where this practice (buying and selling ownership of companies) happens constantly. So let's say you call your stock broker and you say: "Hey, I think Apple stock is going to go down. Sell it now, and buy some Kyphon stock with the money you make from the sale of the Apple stock." So, your broker calls the stock exchange where Apple and Kyphon are traded (Nasdaq), and through the trading process of that market/exchange, you sell your ownership in Apple, and you buy some ownership in Kyphon. Stock prices go up and down based on many factors, but one of the main ones is that there is a limited number of stocks issued by a company, and depending on how people feel about the company, the value of owning their stock goes up and down.

See? It's not that complicated. A stock market is basically just a place to buy and sell ownership in corporations.
 
So if I want to buy 5 stocks from Coca Cola company.... for $50 each...

Total $250. So I paid Coca Cola company $250 for stocks.

And if it went up +1.50... Then I get $51.50 each....

And if I decide to leave it in there, hoping Coca Cola company will go up
and up and up and up... so I can make money off their profit.

You get so greedy. Gamble.... I won't sell my stocks.

But then oops, Coca Cola company loses profit because
Pepsi company got their sodas for cheaper bargain or because celebrity
such as Jessica Alba be on Pepsi commercial, everybody want to drink
cause she drinks Pepsi.

Then oh oh... Coca Cola company stock went down.... losing profit
because of competitors. Went down to -3.25...

So I get $48.25 each....

Oh no I am losing some of my money.... but I will wait and see
if Coca Cola company will increase back up....

But oh oh...

It is down to -1.45.... now I got $46.80

So if I don't sell my stock before I lose it alll..... then I will be broke.

So if I decide to go ahead and sell my stocks for $46.80 each.
Then I will get back $234.


Anyway... and that iPhone, new invention.... We all know that Mac Apple company will get profit because of iPhone. Especially around Christmas time, people will buy iPhone for gifts. Right now it is a good time to buy stock from Mac Apple company, because they are going to make good PROFIT!!!! :fingersx:

SO if I buy $60 for Mac Apple stock... then hopefully many people
will buy iPhone in November or December during Christmas Holiday...
And then on December.... Mac Apple Company stock will probably be
gain +20... I'll have $80....

What if I decide to buy 1,000 stocks from Mac Apple Company?

That would be $60 times 1,000 stocks = $60,000 and
if Mac Company stock gain +20

Then it would be $20 x 1,000 = $20,000 then

My money $60,000 + $20,000 = $80,000....

So I have to risk my money... do I want to sell my stocks now, keep all of my money including the profit I earn $80,000
or leave my money in there... hope that I get more... like $100,000.

That is like that game..... Deal or No Deal... take the money or risk, to see if I can get more than that.

Right?
 
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