Thread: Savings advice
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Old 07-12-2007, 01:46 AM   #7 (permalink)
RT Wolf
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There's a number of ways to make money on the stock market, obviously, but the basics of stocks is this:

Say you own a company and want to raise some capital (for whatever reason, expansion, debt reduction, etc) but say that you don't want to, or can't use other options for raising this capital (too much debt already, or you need mroe cash than you can earn quickly enough), and you decide to sell ownership in the company. That means that you'll sell pieces of your company over to others in return for their money. On the stock market, public corporations' shares ('shared ownership') are traded based on (supposedly) how worthy of being owned the shares are. How worthy they are is determined by different ways, including prestige of hte company, hype around the company, or good old fundamentals like how much money hte company is making.

I know that can be a confusing defintion and its very condensed, so you might like to read a longer article here:

Stocks Basics: Introduction

Now, what the stock market IS is very different from the many ways to make money off of it. I, personally, judge a share as if I was buying a piece of ownership of a company and try to think like an owner and shareholder value. Others can think of it as the lottery.

Hope this is a useful beginning.
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