Download Stocks and the Stock Market

Investing Continued
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A stock is a share of a stock
It entitles the buyer to a certain part of the
future profits and assets of a corporation
selling the stock
You become part owner of a corporation
When you purchase a stock you get a stock
certificate
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Stockholders are owners of a stock
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They make money from the stock in 2 ways
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1. Dividends- the money return a stockholder
receives on the amount he or she originally
invested in the company
Paid only when a company makes a profit
2. Sell the stock
You make money by selling it for more than
what you paid for it
You buy stock hoping that the price will
increase so they can sell it for a profit
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Stocks are bought and sold through brokers
A broker is a person who acts as a gobetween for buyers and sellers
Largest stock market is the New York Stock
Exchange (NYSE)
2nd largest is the American Stock Exchange
(AMEX)
More than 70% of stocks are on these 2
exchanges
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Stocks must be listed to be sold on all of the
exchanges
To be on the stock market:
Corporation must be in good financial
condition
Must engage in legal business
Most are larger corporations
-Most stocks can be sold on the National
Association of Securities Dealers Automated
Quotations (NASDAQ)
-Stocks are not traded in a specific place
-Brokerage firms hold quantities of shares they
buy and sell for investors
-Stocks are from smaller, lesser known
companies