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The Stock Market

Essay by review  •  January 27, 2011  •  Essay  •  613 Words (3 Pages)  •  1,091 Views

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The Stock Market

When a company decides to go "public", it sells shares of the company to people called "shareholders". People buy shares of stock--or a share of the company--in hopes of later selling it for a profit. The way to make a profit off of a stock is to buy when it is low in price and sell when the price has increased to an amount above the original buying price. The interesting thing about the stock market it the possibility of becoming very wealthy by investing in the right stocks.

For a person to invest in the stock market, he must go through either a brokerage company or a stock broker. Before investing, it would be a good idea to talk to a local broker for the experience they have with the stock market. Most brokers work under a well known brokerage company or firm. The investor must also pay a fee to receive the broker's service. If the investor chooses to invest without first consulting a broker, he should know about the business he chooses to invest in. To learn more about a certain business and get quotes, the investor can go to www.moneycentral.msn.com. Here, the investor can find tons of useful information about the business that could be very helpful in deciding the right stocks to buy.

For those who choose not to do their investing through a broker can easily invest using internet based brokerage companies. To do this, the investor must use a company's site that offers this type of trading. Unfortunately, all companies charge a fee to use their services and to buy, sell, and trade stock. This method of investment can be very expensive.

Some businesses pay dividends. Dividends are cash payments per share made by a company to their shareholders. These are usually paid quarterly, or every three months of the year. The shareholder can choose to either have their dividend deposited into an account, or they can choose to have the dividend re-invested into the same stock. Having the dividend re-invested is sometimes the best path to take when investing for a profit.

Aggressive investors will usually buy, sell, and trade on a daily basis. This type of an investor trades according to trends of the economy and news of the company. Aggressive investors are usually interested in making a profit every day they buy, sell or trade. On the other hand, an investor who does not buy, sell, or trade every day will most likely be interested in making

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