Your Neighborhood Market - the Stock Market

THE STOCK MARKET

The stock market is a huge market. That's what it is, just a huge market where stocks (pieces of paper which represents portions of a company which may be traded as transferable certificates) are exchanged (bought or sold) with money as the bottom line exchange factor, just like in any grocery store on Main St. USA. Stocks are sold and bought in lots (100 stocks, 1000 stocks, etc...) or separately by stock.

The price of stocks is determined by Supply and Demand. This is the interplay of the quantity of products or goods offered for sale at certain price and the quantity of products or goods purchased or bought at those prices in a free market. This is a very important point, because it relates to everything you do when buying or selling. Think about selling your house now in this market... OK. Now, think about buying milk at the grocery market. It's the same market but at a different level.

Did you ever wonder why dairy products are very reasonable one week and then two weeks later the price is doubled?! This is supply and demand at work. The demand for certain product goes up, and then the price goes up. This is just like the stock market. Depending upon how good a company is producing, as in good products, showing good customer service, selling a great marketing program, the company may have a large demand and this means the price of stock will go up. If the company is favored in news releases, this will also tend to increase stock prices. This also works in the negative direction as well, where the company produces inferior products and has bad news releases about it.

Stock trading is easier than ever now with online companies like Scot trade, Schwab, etc. Trades are fast, commissions are low, training and advanced tools are at your fingertips.

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