The stock market can be traced back to the late 1700s, in the infancy of the United States. Beginning in Philadelphia, the first American stock exchanged was founded in order to bolster commerce in this new world. Before long the New York Stock Exchange was born which soon gave rise to the New York Stock and Exchange Board which led the now frenetic pace that exists today on Wall Street.
In buying a stock, an investor becomes a shareholder – or part owner – in a company. The company then uses the money supplied by their investors to further their business and increase profits. These profits are reflected in the growing price of the stock – the money needed to purchase a share of the company. Investors who now own stock in the company have seen their investment grow and should they now decide to sell this particular stock they will make more money than they originally paid for it.
This is the basic premise behind the stock market. For many generations, the stock exchange was a brick and mortar world in which investors operated through their stock brokers – professionals who would “broker” a deal between the company that was...
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