A stock is essentially a piece of a company. You are a shareholder when you own a stock. The shareholder will share in the companies profits and has a voice about how the company is run.
If a company wants to expand their business in some way, they will usually sell stocks to gain the capital. Depending on how successful a company is will set the price of the stock.
Purchasing stocks in a new company would be considered risky considering the new company does not have a proven track record. Investing in a company that has been reputable will have a much lower risk factor. Although purchasing stock in a new company that eventually is very successful will yield a great return,
An investor will buy and sell stock through the National Association of Securities Dealers Automated Quotation System (NASDAQ) or the New York Stock Exchange (NYSE). Companies who are on this exchange system may sell their shares on the open market. You may also purchase stocks that are not on the exchange, but we do not address that in this article.
Investors will have a stock broker that will make all the transactions for them. Brokers will be instructed by their clients to sell or buy stocks. Investors can instruct their brokers to buy or sell a stock when it reaches a determined value. The broker will then find a buyer or seller of the stock. A commission is granted to the broker for these services.
If a company wants to expand their business in some way, they will usually sell stocks to gain the capital. Depending on how successful a company is will set the price of the stock.
Purchasing stocks in a new company would be considered risky considering the new company does not have a proven track record. Investing in a company that has been reputable will have a much lower risk factor. Although purchasing stock in a new company that eventually is very successful will yield a great return,
An investor will buy and sell stock through the National Association of Securities Dealers Automated Quotation System (NASDAQ) or the New York Stock Exchange (NYSE). Companies who are on this exchange system may sell their shares on the open market. You may also purchase stocks that are not on the exchange, but we do not address that in this article.
Investors will have a stock broker that will make all the transactions for them. Brokers will be instructed by their clients to sell or buy stocks. Investors can instruct their brokers to buy or sell a stock when it reaches a determined value. The broker will then find a buyer or seller of the stock. A commission is granted to the broker for these services.
About the Author:
Laura Macavoy is a graduate student from Bentley University. She has many articles published to newsletters on investing and economy. Laura vigorously studies economy issues and posts her articles with her readers through numerous blogs. Check out more from Laura as well as many other investment gurus at Mutual Funds for Young Investors
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