Wall Street is the site of the New York Stock Exchange ( NYSE ). This is one of the busiest places where stocks and bonds are bought and sold. It is also one of the most famous. One of the reasons that stock is sold is to raise money to start a business. Investors can buy "stock" in the business--they own a "share" of the business, as long as they own the stock. When they sell the stock, they have sold their "share" in the business. They may sell the stock or "share" for more than they paid for it, and make a profit. If they sell the stock or "share" for less than they paid for it, they have lost money on that investment.
One of the things that can go wrong with the buying and selling of stock is too much speculation. Speculation is like gambling--the only reason people are involved is to make a quick profit, instead of investing for retirement, or hoping for gains when they sell the stock years later. Any person, or group of persons, with a large sum of money to invest can make a profit on the small daily fluctuations in the price of stock--if they invest enough. If a stock's price goes up only ten cents a share, that may mean a large profit to someone with ten million dollars worth of stock to sell--stock they might have bought earlier the same day. Too much of this behavior, and too much profit from it, alters business for the worse. Stock prices, and profits from stock deals, become more important than profits from doing business. The "shares"of stock were part ownership of a business --a business that now worries more about stock prices than about making better products or employing more people.
A stock exchange is an invention. It is one way to start a business with little or no capital ( money, or the capacity to get it ). A stock exchange was not meant to be a casino, although many people use it that way.
the facts and just the facts about diverse topics--the kind that involve at least a short explanation
Showing posts with label stock. Show all posts
Showing posts with label stock. Show all posts
Monday, November 7, 2011
Tuesday, August 2, 2011
a share of stock
A share of stock is actually so easy to understand as to make the level of confusion surrounding it suspicious--as in perhaps it IS all a diabolical plot. That said, a share of stock is a part interest in the corporation that issued the stock. If a publicly owned (stock-issuing) corporation issues on million shares of stock, and you buy one of them, you have purchased a millionth part of the corporation. You are a part owner--one part in every million of that corporation is yours.
The stock in publicly owned corporations (remember that means stock issuing, not government owned) usually comes with a vote--one vote per share of stock. It's not exactly a democracy, which would have one vote per person--it's just how a corporation is run. Stockholders elect the board of directors of the corporation. The board of directors is headed by a chairperson of the board, or a chief executive officer (CEO).
If you own stock through mutual funds, you have probably given your vote as a "proxy vote" to an employee of the mutual fund ( a mutual fund buys and sells shares of stock, and then sells shares in itself to investors--much like "holding company" of the 1920's, now illegal).
The stock in publicly owned corporations (remember that means stock issuing, not government owned) usually comes with a vote--one vote per share of stock. It's not exactly a democracy, which would have one vote per person--it's just how a corporation is run. Stockholders elect the board of directors of the corporation. The board of directors is headed by a chairperson of the board, or a chief executive officer (CEO).
If you own stock through mutual funds, you have probably given your vote as a "proxy vote" to an employee of the mutual fund ( a mutual fund buys and sells shares of stock, and then sells shares in itself to investors--much like "holding company" of the 1920's, now illegal).
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