What Is The Stock Market And How It Works

Maybe you never took Economics 101, and The Wall Street Journal might as well be written in a foreign language for all the sense it makes to you. But perhaps for the first time in your life you have some money saved, and the 2.5 percent interest you’re earning on it in your savings account isn’t enough. So you’re eyeing the stock market. Problem is you don’t know the first thing about it.

You’ve come to the right place. Let’s start at the beginning.

The stock market allows anyone to purchase a part of any publicly held company, that is, any company that sells stock to investors. In this way, the stock market raises capital a company can use to continue producing its product or offering its service. In return for the use of investors’ money, if the company does well, investors get to share in the profit. If the company does poorly, however, investors see a loss.
I’ve created this easy-to-follow Investing for Beginners guide to simplify the learning process for entering the stock market.

By leaving out all the confusing Wall Street jargon and explaining things in simple terms, I’m hoping you’ll find this as the perfect solution, if you are willing to learn.

Before we get started, here is a breakdown of the 7 categories for the official Investing for Beginners guide.