The stock market is a place where people buy and sell shares (stocks) of companies.
Here’s a clear breakdown:
- Stocks (Shares): When you buy a stock, you own a small piece of a company. If the company does well, your stock value may rise, and you can earn money.
- Stock Market: It’s like a big marketplace (physical or digital) where these stocks are traded. Examples include the New York Stock Exchange (NYSE) and Nasdaq.
- Why Companies Sell Stocks: Companies issue stocks to raise money for growth, research, or expansion.
- Why Investors Buy Stocks: Investors buy stocks hoping their value will go up (capital gains) or to receive a portion of profits (dividends).
- How Prices Change: Stock prices go up or down based on supply and demand, company performance, the economy, and investor expectations.
👉 Think of the stock market as a giant auction house where company ownership pieces are constantly being bought and sold.
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