1.How does the stock market affect our lives?
The stock market is a means for individuals to
participate in our economy as
an owner of a business. A share of stock
is a certificate of ownership in a
corporation. People buy stock in the hopes
that the value of the company
will increase and that they will eventually be
able to sell the stock for
more than the amount that they paid when it was
purchased. Another way that
people make money by owning stocks is through
receipt of dividends.
Dividends are a stockholders share of the
profits. A corporation must pay
all its expenses including depreciation, pay
its taxes, and then if there is
anything left may use it for savings or divide
that money among all the
stockholders.
The condition of the stock market is reported
in the news both for the
investors and for those who are not currently
involved. It is often
considered an indicator of the health of the
economy. When the markets are
doing well, people are confident about their
futures. When the market goes
down, people become more cautious.
2.What do you think would happen if the stock market had
never started?
Our economy would never had been able to grow
as large and successful as it
is today without the ability of business owners
to combine with others so
that they could increase the money they have
to work with.
It is much like a situation in which you
might want to buy something, but
do not have enough money. You could get
your brother or sister to help you
buy the item, then you could share the ownership.
Together you both had
enough money, where individually you could not
get what you wanted.
3.Could you get a good stock for less than $50.00?
There are many stocks that sell for less than
$50.00 per individual share.
However, the standard way stocks are sold
is in "lots" of 100 shares. You
will also have to pay commission to the broker.
Commission is a percentage
of the sale. That is the way the broker
earns his money. If your total
amount of money available for investment is only
$50.00, it would probably
be better for you to look into a mutual fund.
Mutual funds pool the money
of many investors into ownership of a variety
of stocks. That way you have
a better chance for an increase in value and
a lower chance of loss.
4. Do you think the stock market is doing okay enough to buy
a stock now?
Some days are good, and some days are bad.
Overall the market is pretty
slow. Stock is only a good potential investment
if you do your "homework."
Remember there is no guarantee that you
will make money. Sometimes the
business goes through a bad period. If
it does not make money, you do not
make money. If the business closes, then
it is possible to lose all the
money that you have invested. Unless you
have a great deal of knowledge and
confidence in the company that you are considering,
you should not invest.
5. Do you think the stock market is a good place to work?
Many people like working in the stock market.
During good economic times,
they can make a great deal of money. It
is a high stress, high pressure
sales job. If you do not get people to
buy or make trades, you do not earn.
In economic times like we are having now,
it is very hard to get people to
take chances with their money because there are
more secure investments.
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