The stock market is a financial marketplace that matches those who want to buy securities with those who want to sell them. It’s a key component of global capitalism that is increasingly seen as central to the world economy.
Stocks, known as equities, are securities that represent partial ownership of a publicly traded company. Investors buy them with the hope that they will rise in value, enabling them to sell them at a profit. There are many factors that can cause individual stocks to rise or fall, including the economic outlook, how a particular company is performing and how much competition there is for its products or services.
Publicly traded companies issue stocks when they raise money from investors to grow their businesses. These shares are then listed on a stock exchange, such as the New York Stock Exchange or Nasdaq, and can be bought and sold by anyone with a brokerage account. Each share represents a small piece of a company, with major public companies having millions or even billions of shares in circulation. Share prices are determined by supply and demand, and change frequently as buyers and sellers negotiate new prices with each other.
There are also a number of different types of securities that can be purchased and sold in the market, such as real estate investment trusts (REITs), bonds and commodities. Each of these has its own unique set of characteristics that make it suited for different purposes and investors, but they are all part of the same market that is constantly changing, both in terms of prices and in how we think about it.