Stocks 101 – The Stock Market Explained

If you are wondering about the stock market and how it works, the easiest way to understand it and how it works is by thinking of a regular market where you can buy different goods by various brands. You as the buyer only need to take a look at what’s being offered and determine which ones are worth buying.

In the case of the stock market, though, the goods are the stocks being provided by different companies. What is a stock? It is a share of ownership to the company offering it. When you own stocks of a company, you own a part of the enterprise, although it may be in such a small amount.

How do you make money from stocks? There are two ways. It’s either you wait for the issuing company to issue dividends or profits on each share, or you wait for the price of the stock to appreciate.

Most people who enter the stock market, though prefer to buy low and sell high instead of waiting for the dividends to come in. Unfortunately, though, there are investors that are too impatient and do not wait for a stock price to stabilize before selling.

Anyway, if you are wondering how you can enter the stock market, the best place to go are websites e-Trade and Scottrade among others. These sites offer you access to buy stocks that are currently being traded on NASDAQ and the New York Stock Exchange, two of the country’s largest marketplaces for company stocks.

Before anything, though, there are certain factors you need to consider, including the management team of the issuing company, the products and services offered, and the company’s prospect for growth shortly. All these factors combined determined if the price of a stock will rise so you can sell for a profit. For more details visit