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The Stock Market

What is The Stock Market?

A place where stocks and bonds are both bought and sold.

The Stock Exchange

Within the Stock Market, the Stock Exchange connects buyers and seller by helping them trade stocks

This facilitates through:

  • Listing stocks
  • Processing payments
  • Tracking prices and sales data

Two major stock exchanges in the U.S.

  1. “The New York Stock Exchange” on Wall Street in Lower Manhattan
  2. “Nasdaq Stock Exchange” smaller and home to more technology companies

All of the stock exchanges create a globally connected marketplace.

How to pick stocks

Stocks can be unpredictable and risky investments.

Resources

  • Recommendations from brokerage firms
  • Recommendations from friends and family
  • Investing in companies you are passionate about

Ways not to invest

  • Financial news shows
  • Throwing darts at the newspaper stocks page

Why do companies issue shares on the stock exchange?

To raise money to:

  • Improve on products
  • Release new features
  • Expand operations
  • Hire more employees
  • Provide liquidity to shareholders
  • Gain credibility

Bear Market vs. Bull Market

Bear Market

  • Pessimism
  • Price goes down

Bull Market

  • Optimism
  • Price goes up

“Greed is good”
Famous line from the 1987 film Wall Street by Gordan Gekko.

Michael Douglas plays a corporate raider who buys underperforming companies and tears them apart for a profit.

Good Luck!

 


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