The Mystery behind the Stock Market

Are you aware of the terms stock market, bonds, shares etc.? All these years we have heard our parents investing money in the stock market. So now let us find out how exactly the stock market works.

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Imagine you have bought some toys from the market, now you resell those toys to your friends for double the amount of your purchase. The stock market also works the same way, but here the difference is that there is no physical object; instead there are stocks of the company on sale. Such as, if a listed company has 100 per cent shares for sale and you buy just one, then you become one per cent owner of that company. So in the future, if the company makes any profit, you get one per cent share of it.

The good part about stocks is that you can buy and redeem them anytime you wish. If the company is going under loss, you can quickly sell the shares and take back your money. People buy stocks in the hope that if a company does well, then they will get their share.

Every country has its own stock market which determines its economic activity. The stock is the only way through which companies can open market for people to buy their shares and in return increase the capital income of the company. In fact, company shares are the most attractive way to invest money than any other inactive investments such as property or insurance. History has proven that the country whose stock market is on the rise is considered to have a strong and stable economy.

Knowing little about stocks is better than knowing nothing.  Although investing money in stocks will begin when you get older, you can start with a piggy bank to learn how to manage your money well.

Tejal Mistry

Also Read: Why we don't print more money