If you are one of the average people out there in the United States who has only a little bit of money to invest, you may often say to yourself, How does the stock market work? Can I invest if I dont have millions of dollars to spare? It can be intimidating at first, but once you learn the basics of investing in stocks, the stock market really isnt all that difficult to understand. How does the stock market work? Here are the answers that can get you started on your way toward making some financial decisions that might just keep you in the black now and for years to come.
The basic premise of the stock market is to buy low and sell high. Maybe you have heard that before, but are you wondering just what you are buying and selling? Are you wondering how on earth you know what is considered low and what is considered high? Do you really understand what the stock market does?
First of all, lets determine exactly what a stock is; a stock is a little piece of a company, often called a share. If you own a share of stock in Restaurant X, you own a tiny portion of Restaurant X, along with all the other shareholders, or stockholders, in that company. If you have bought your...
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