Purpose of the Stock Market

• Stock markets are lucrative for businesses and investors alike. From a business standpoint, the corporation can sell shares on the market in order to raise money that can then be used to further the purpose of the company. For investors, the market offers opportunities to potentially earn large sums of money; if a company does particularly well, for example, that company's shares increase in value. Shareholders who buy stock when the price is low can earn a windfall when the value increases.
  
  

Shares of Stock

• A share of stock is an ownership interest in a corporation. Large corporations, like Apple or Google, have millions of shares for sale on the market. If a person purchases one share of Apple stock, she technically is an owner of that corporation, albeit her ownership interest is significantly smaller than a shareholder who holds hundreds of shares of stock. Shareholders are entitled to a share of the corporate profits. The converse is also true: the shareholder is affected when the company loses money. The value of company shares rises and falls based on company performance and other market conditions.
  
  

Investment Strategies

• Brokers, financial consultants and other market experts have several strategies for investing in stocks. Not every strategy works and not every strategy is appropriate for an individual's unique financial situation. Over time, however, shares in the market have outperformed other forms of investment, such as bonds or savings accounts. Those interested in purchasing stocks should do comprehensive research and consider hiring a financial expert.
  
  

Purchasing Stock

• To purchase shares of stock on a public market, a person must go through a broker or a brokerage firm. Financial institutions offer brokerage services; individuals can also open investment accounts over the Internet on websites such as eTrade or Sharebuilder. Once a person has a brokerage account, she simply tells the broker what stocks she wants to purchase and tenders the money; the broker then finds a willing seller and the shares are transferred to the buyer's account.