Friday, September 23, 2011

How does a stock market work? Does it make much money because of the stock market?

Please answer if you are a Stock Expert or if u work for a GOOD Bank and use simple words. I might not understand!!!|||Huh?|||The "stock market" is where people buy and sale shares of stock. "Stock" is something that represents a small ownership in a company.





In other words, if you bought 1 share of McDonalds, you actually own a small (VERY small) percentage of McDonalds. So, if you owned all of the shares of McDonalds, you actually own the company.





A share of stock becomes more valuable typically as the company makes more money. So, if McDonalds becomes more profitable, then their stock also becomes more valuable. Therefore, it is indeed possible to make significant amounts of money in the stock market.





However, before investing, also realize that it is also possible to LOSE significant amount of money (all of it). Therefore, learn as much as possible before investing. I have included a link to a free investments course below if you want to learn more.

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