Your Own Stock Market

[Stephanie Quinn]

For those that are new to investing, learning the lingo that is used
on Wall Street and in economics classrooms around the globe is
essential. When you hear the phrase "stock market" you get a vague
picture of a group of men and women running around like crazy people
with slips of paper in their hands and yelling out numbers and words
that you can't quite make out. To understand what's going on, let's
start at the beginning and find out what stock is.
Stock can be described as the wealth (or capital) raised by a company
or a corporation from the issuance of shares.
If you own stock in a company, say Microsoft, that would make you a
shareholder in Microsoft. If you take all the shares available from
Microsoft, or any other company and put them together, that is called
Microsoft's market capitalization. This is figured by multiplying the
current price of a stock times the number of shares.
Stock falls into four major categories. There is common stock,
preferred stock, duel class stock and treasury stock. Common stock is,
just like the name says, the most common kind of stock available.
Ownership of common shares usually comes with some voting rights when
it comes to decisions made by the corporation. Preferred stock is
different from common stock in the sense that they usually get paid
more dividends and usually come with extra rights and decision making
abilities for the company they are for. Dual Class stock is a
combination of the previous two kinds of stock and the rights attached
to each share vary. Finally, treasury stock are shares that were once
issued to the public, but have since been bought back by the company.
The history of stocks goes back many hundred years to the Dutch East
India Company, who began offering shares of their stock as far back as
1602. The East India Company helped to pioneer the idea of joint
ownership and helped the economic growth in Europe at that time.
The most popular place to trade stocks in the United States is, of
course, the New York Stock Exchange, where millions of shares change
hands on a daily basis.
The world of economics and stock trading can be very exciting and very
profitable for those that know the ins and outs. Hopefully, this
article helped shed some light on what stocks are and how they are
used by companies.

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