Now that I have impressed on you the importance of saving your money earlier I now want to have a multiple different ideas of stock investing. As I have stated in previous posts that stock investing is one of the greatest generators of wealth, I want to teach you to wield that power on your own. Plus often times I receive many questions from people about stock investing. So here we go.
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| Share of Google Stock |
What is a Stock?
Stock is a partial ownership in a company. As a shareholder (stockholder) you provide capital to the business in return for a share of the profits. For instance if there are 100 shares of ABC Inc. and you own 1 you have 1% of the company.
First thing to do when starting investing is finding a broker. A broker is the person that goes to the stock market and completes the deal on your behalf. I suggest Sharebuilder, they don't have any account minimums and have very small commissions with their automatic investing option.
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| What the specialist sees and matches the buyer and Seller |
The way the market works is through matching buyers and sellers. Lets say for instance you want to Buy 100 Shares of GE you would go to the broker and in turn they would contact the stock exchange and a specialist would match your bid with the closest asking price. When there are more bidders than people asking (selling) the price goes up. When there are more people selling than buying the price goes down.
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