The Stock Market

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Recommended: The role of the stock market in the economy

There is a connection between the stock market and the economy. It is noticeable how economic activity influences stock prices. The current state of the economy has major influence over how much money is being deposited into the economy as well as a consumer's confidence in their income. Whether an individual invests in the stock market or not, it will have an impact on everybody and every company. Every investor’s goal is to gain the most money from the stock market. To do so, much knowledge is needed which can help predict the outcome. There are techniques used by forecasters to predict whether the stock will go up or down. However, it will not be an exact approximation because no one can perfectly predict what the firm will do next. A stock is a piece of a company that the stockholders, people who own a share, entrust in potential firm to gain more money in return whilst increasing the value of the company. A business who wants, or needs, money for growth enters the stock market for public investment. The stock market, or the equity market, is a system where buyers and sellers of shares, small pieces of a company, come together to invest, privately, in a particular company. If a company, for instance, has 100 stocks and a person owns one stock, that person owns one percent of the company. The goal of every stockholder is to make as much money they can from the growth of the company that is being invested in. The terms “up” and “down” are used for the rising and falling values of stocks. When the value of a stock goes up and the stockholder sells. The money that is made would be from the profit of the increase. For example, if a stock was bought for $10, and the value of the stock increases to $25, if the stockholder decides... ... middle of paper ... ...ivided into debt securities and equities. A debt security is the money that is borrowed and must be repaid. An equity represents ownership in interest that is held by shareholders. “Stock price Analysis” Stock Price Analysis N.p., n.d. Web. 19 Aug, 2013 Great introduction of the two theories I wrote about. The site talked about the goal of each approach. Watson, Sam. "What's the Basic Function of the Stock Market?" PBS NEWS HOUR. PBS, 3 Aug. 2009. Web. 26 Oct. 2013. Sam Watson explains why it matters to a company why their stock goes up and down. Also, It is answered how buying a stock would contribute health to that company "What Is the Stock Market?" Stock Market. N.p., n.d. Web. 26 Oct. 2013. It is explained what happens when an investor buys a stock of company. As a company makes money, its value goes up. Only a business corporation can issue a stock.

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