Stock market investing is an area of investing that can make or breaks you, and stock investing offers few guarantees. Investing your money in stock is a lot easier when you know the investing and investment basics. You may feel clueless now, so read on to learn the real basics.

What is the Stock Market?

The stock market is just like any other market, in a general sense. Understanding the stock market will first require understanding what a share market is. At a market, there is buying and selling of goods and/or services. For example, you go to a supermarket to buy food. The supermarket is selling you the food.

At the stock market, shares of stock are being bought and sold. As a stockholder, you can sell stock, and just about anyone can buy stock. Of course, it's a little different in that you can't physically go to an exchange and buy what you please. You have to sign up with a brokerage firm and have a stockbroker buy or sell what you need. Ultimately, it is easier this way because you don't have to go anywhere, especially with online brokerage firms.

What is the Purpose?

The purpose of the share market is to raise money for corporations and earn stockholders money. A corporation will decide to issue stock in order to fund the company. When you buy stock in a corporation, you become part owner of that corporation, even if you only own one share.

It is really not the same things as issuing bonds. A bond is debt. If a corporation issues a bond and you buy it, you are lending them money. You will get the money repaid to you according to the agreement of the bond, plus interest. When you buy stock, you are buying equity in the company and are becoming an owner. They don't owe you anything, but you can sell it whenever you want. Also, they may decide to issue dividends which is extra money per stock you own.

What can the Stock Market do for You?

The share market can earn you a lot of money, if you know what you are doing, take care of your risk, and stick with it. You could lose a lot of money if you invest with too much risk or if you don't give it time. I can't guarantee you anything with the markets, but do have the opportunity to do well. Start by understanding the stock market and learning what you can do make the right choices and do well.

Understanding how stock market works isn't hard. Read a few books on the subject and you can have enough basic knowledge to get started. After that, you can start investing right away or start with a simulation game to get a hang of the markets. See where it takes and enjoy the rewards plus the risk of course.

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