what are , shares? What do they mean by index? what are nasdaq, nyse? what do points symbolise? How does the market correlates with the economy? Hypothetically, how do you invest in the and get ? Explain any other things that you find necessary.

 

  • woshaugh 9:05 am on February 28, 2010

    Owning a share or stock of a company is owning part of the company. One is usually something really small like 1/200000000 of a company. The price goes up or down depending on how much people think the whole company is worth. The stock market index is a measure of the value of all the stocks that are listed on that index. Nasdaq and NYSE are examples of stock exchanges. These are places that people wanting to buy or sell stocks come together. How the market performs correlates positively with the economy. When the economy is good the value of companies generally increase and so the market increases.

    Generally, you make money by buying stock (usually through a broker) at one price and selling it later at a higher price. You could also buy a stock that issues dividends (cash paid by the company to people who own the companies stocks). There are other strategies as well such as shorting a stock, meaning you borrow shares from your broker, sell them, and buy them back at a lower price (doing this you make money when the stock price goes down).

    The idea behind stocks is risk and return. You take on certain risk by owning the stock. The riskier the investment, the more you could lose or the more you could make.

    Stocks are not a loan to the company. A loan to the company would be in the form of something like corporate bonds. Stock is partial ownership of the company. If you own the stock, you actually have the right to vote on certain company matters such as possibly selling the company to another company.

  • Trent D 9:05 am on February 28, 2010

    Stocks are shares in companies, a share is a form of a loan. Meaning that investors loan money to the company and in turn receive stocks. If the company does good the stock goes up and you make money. A stock index is a group of stocks, the nyse and nasdaq are differnt index’s that are compiled of diferent stocks. the idea of an index is that it gives you a general feel as to how the market is performing because it is made up of portions of the market.

  • rr12d 9:05 am on February 28, 2010

    A share of stock isn’t really a form of "loan" you get part of the company in return for your money so it’s an investment.

    However the company does take the money from the IPO and all other stocks the direct owners sell to others and use the money raised for the company.