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The Stock Market

 

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             asurement of the average, and the average only dipped down that low again during the Great Depression of the 1930's. The market grew rapidly, and in 1899 there were 1,208 companies trading $2.27 billion in securities (Sobel 97). Since the start, the stock market has fluctuated but constantly risen in volume over the years. Today, the Dow Jones Industrial Average monitors the top 30 "blue chip" companies whose stocks are traded in the New York Stock Exchange (Fair 1).
             There are countless reasons for investing money into the stock market. The main idea of investing is taking money and eventually turning it into more money (InvestorGuide University 1). Investing is necessary in combating inflation. A dollar today is worth less than a dollar in the future, and, unless you invest, you will be losing money because of inflation. Investing in the stock market is sometimes thought of as "protecting" your money you have from interest. Profit is seen when the investor takes a risk in his or her investment. There is never a guarantee in the stock market. It is necessary to go out on a limb sometimes and hope for the best.
             I concentrated my research on the basics of the stock market and learning only what I needed to know to get started, if that time should ever come up. Stocks are nothing more than certificates of ownership in a given company (Flumiani 16). Stocks are divided into two different types: common stocks or preferred stocks. Preferred stocks have preference over the common stock when companies are assets are declared in the case of liquidation. Stocks are bought and sold by a broker, who is someone who sells stocks for a dealer. A dealer actually has information on the inventories of stocks, and sells based on that knowledge through a broker. A very famous and well known dealer would be Charles Schwab (Bernstein and Damodaran 101). Prices of stocks are always changing in the economy, however common stocks typically change in price more than preferred stocks.


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