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Investment Basics: How do Stocks Work by prasad adskaro
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Investment Basics: How do Stocks Work |
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Investment,Business
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If the state of the stock market is a common topic in the daily news especially in hard economic times, but for those without a background in personal finance or business, financial discussions may sound more like a foreign language than relevant news stories. Forming an understanding of what stocks are and why people buy them is an essential aspect of financial education In the modern economy. What are Stocks? A share of stock is a small fraction of ownership in a company. As businesses grow, they often need large sums of money to undertake new projects and to fund expansion. One way businesses can raise money to fund expansion is by selling shares of stock to investors. Investors buy stock in companies because the value of stock can increase over time depending on demand for the stock. When demand for a certain company’s stock goes up, the price of the stock rises aid when demand goes down, stock prices fall. Demand for stock typically follows the performance of the company: when companies have strong sales and profit the value of their stock tends to rise. If an investor buys stock in a company and the value of the stock increases over time, he can sell the stock for a profit. Profits gained from selling stocks and other assets are known as capital gains. visit: Stock Market Recommendations
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