The stock market is a place where people can participate in our economy as an owner of a business. People can do this by buying shares of stock in that business. A share of stock is a certificate of ownership in a company. The price of a share of stock is one way to measure the value of a business. If the value of a business goes up then the stock price goes up. If the value of a business goes down then the stock price goes down. If the stock market is doing well, then you can earn money. If the stock market is not doing well, then you can lose money. How the stock market is doing affects how our country is doing.
The stock market is a good place to invest for the future. Some people make money in the stock market and leave it as an inheritance for their children, grandchildren or great grandchildren. If you make enough money you can retire at an early age and live off that money. You can travel all over the world with money you made in the stock market. Some people invest in the stock market to earn money for their child’s college fund. Others use the money made from the stock market to buy houses and cars.
People can even work at the stock market. If you buy and sell stocks at the stock market you are called a stock broker.A stock broker needs people to buy stocks so they can get their payment, which is called a commission. A stock broker needs to be a good sales person to make a good living. At the stock market stock brokers hire a lot of secretaries and assistants to help them with their work. Other people make money as a result of the stock market, like office builders, stores and restaurants. A lot of people love to work in the stock market.
If you do end up buying shares of stock then you need to be aware of some of the risks in the stock market. When a company is not doing well and not many people invest in that company, then most likely the value of that company will start going down and you will soon lose money. A company may even have to close. Just think if you where one of the people that loses their job because the company closed. If they lose their job how will they be able to pay for a house, car, clothes or food? And, the people who sell houses, cars clothes and food will also not make as much money. Eventually you won’t be able to do some of the fun things you enjoy doing, like going out to eat ice cream. If a large company closes, then it could cause smaller companies to close as well. Therefore, if you invest in a company that is doing bad and you were counting on that money for the future, then you may have to work hard to make up the money.