Understanding the basics of stocks
Subjects in this thread
The story
What is stocks?
Why does the stocks change value?
Where do I buy stocks?
What is stocks?
Why does the stocks change value?
Where do I buy stocks?
The story
Stocks used to be a tool used by the rich people, to invest into companies so they could improve their wealth. But in the 90s all this changed, normal people started to invest during the "dotcom years" where lot of people got tricked into doing get-rich-in-no-time tutorials as we know them from the eBook bazar here on HF(ba-da-bum-tsch). Lots of people got scammed by this, and lost all of their spare money, or even their house. But with the quick growth of the internet, normal people started to be able to do small stock investment without any work, and they could see their earnings whenever they wanted.What is stocks?
The definition of a "stock" is basically a "share" of the company. The stock represent a part of the companies assets and earnings. Whenever you buy more stocks, your share in the company grows.When you own a stock in a company, it means that you are one of the many owners, also called shareholders. When you own a stock this also mean you own a part of the company, if we look at this technically this means you own a small part of every chair, computer, and tables owned by the company(etc.).
But just because you are a shareholder, it dosen't mean you can tell the company what to do, so if you own a share in Mars Inc. you can't just walk into the factory and take a snickers.. Sadly enough.
Why does the stocks change value?
Stocks is changing in value every day. And the price changes because of the supply and demand. Example if more people want to sell their stocks, than people want's to buy it, the price will fall.Where do I buy stocks?
You can either use a brokerage with is the most popular method, or you can buy DRIPs(dividend reinvestment plans) and DIPs(direct investment plans).There's two different types of brokerages. Full-service brokerages offers you expert advices and they can manage your account, oh and they charge a lot of money. Discount brokerages is a lot more cheaper, but they don't really care about you, and you will most likely don't get any advices from them.
DRIPs and DIPs are when individual companies allows shareholders for a minimal cost, to buy stocks directly from the company.
Thanks for reading this basic tutorial on stocks, if you think of anything I should add, have any questions, or think I should make it more advanced. Please tell me.