The stock market is where people buy and sell shares of companies. Each share represents a unit of ownership in the company that issues it. Investors make money when the value of those shares rises.
There are many ways to invest in the stock market, including through a brokerage account with a broker or advisor, or a robo advisor that makes trades on your behalf. Regardless of which path you choose, it’s important to do your research and understand the lingo before you begin.
Investing in the stock market is not for everyone. It takes time to learn the ropes, and it is possible to lose money if you don’t know what you’re doing. But if you are willing to put in the work and stay disciplined, investing can help you grow your wealth over time.
As with any investment, the stock market is based on supply and demand. If lots of investors want to buy a particular share, its price will go up, which can entice current shareholders to sell for a profit. Alternatively, if few investors are interested in buying a share, its price will go down.
The stock market is also home to indices that track specific groups of stocks, such as the Dow Jones Industrial Average and the S&P 500. These are used by investors as benchmarks for their own investments and to gauge how well the overall market is performing. This has become even more true as the global economy continues to be financialized, with the stock market increasingly considered a critical component of society’s financial health and prosperity.