Stock Trading or Gambling? "The stock market is a great cauldron of the hopes, desires, and despairs of speculators, or traders. If it were not for the speculators, there would be no active stock market. If it not for speculators, America would not stand where she does, as the leading industrial country in the world. We may deplore speculation, but if it were not for this outpouring of money for stocks, you and I should not enjoy a fraction of the comforts and luxuries which we accept as necessities." (Neill, 10) The stock market gives a great opportunity for all people to make money.
But stock trading as occupation is not easy work to do. You have to have certain level of knowledge, experience, some mathematical thinking in order to succeed. In the late 1700's, some men signed an agreement stating that they would buy and sell stocks among them. They started by trading only one stock but the number has since grown to more than 3, 000 stocks! What they started came to be known as a stock market. The stock market is a place where people buy and sell equities. There is one main reason for the existence of the stock market, to raise money for government and businesses.
It creates a place where people can either sell or raise money. In order to do this, both governments and businesses issue shares on the market. These shares are also known as stocks. Thus, the name of the stock market is fitting. A stock is a certificate that shows you own a small fraction of the company which you have invested your money in. With the purchase of a stock, you are buying a small piece of everything that company owns.
Once you have purchased a stock, you can be given the title of stockholder or shareholder. In essence, a stock is a representation of the amount of a company that you own. There are two main types of stock. They are known as common stock and preferred stock. There are many advantages and disadvantages two owning the two types of stock.
A common stock is the most common of stocks issued by corporations. With the purchase of a common stock, the dividends will be greatly influenced by how the company is doing. If the company you invest in is doing quite well, then likewise with your stock. Where as if the company is hurting, the stock will be going down, just as hard..