Introduction to the Stock Market
You've likely already heard people discussing investments and the stock market. At first, the terminology they use may sound a little strange, but the stock market is actually quite fascinating. It is a way for people around the world to buy and sell goods without having to deal with physical items. Let's have a look at how the stock market works.
The stock market is just that. It is a market. However, instead of having stalls with piles of products, people buy and sell stocks or shares. Stocks represent a partial ownership of a company. Suppose someone owns a company. If they enter it in the stock market, they might decide to divide the ownership into a hundred parts. That means a hundred people could now own the company. When the company makes money, that profit would be divided equally among the hundred people. In the stock market, people can buy much more than just one stock. They can also buy stocks in several companies at the same time. One of the most famous stock exchanges is the New York Stock Exchange (NYSE).
If you've ever seen a stock exchange ticker, you would notice the stocks are shown in red or green, with little arrows next to them. This indicates whether the stock is rising or falling. Imagine that our little company announces that they will be launching a really cool product that is sure to be extremely popular with everyone. Now, a lot of people will try to buy stocks in that company, because they know that the profits in the next year will be high. When everyone tries to buy that company's stock, the price becomes higher. On the other hand, if the company announces that nobody likes their products anymore, everyone will sell the stocks and the price will quickly drop.
In the old days, stock trading was known as speculating, since people often relied on luck or guessing. Today when people trade stocks, they have to study and analyze the news, trading patterns and the state of the economy. This helps to make an educated decision about whether to buy or sell. When people trade wisely, they can make a great deal of money.
Check out the following links for games, activities and information about the stock market and trading shares.
- What is Investing? — Learn about what it means to invest and how it is done.
- The Stock Market — Find out how the stock market works and how people can trade stocks.
- All About Stocks — Stocks allow people to buy a partial ownership of a company and share in its profits.
- The Great Depression Crash — In 1929, the stock market plummeted tremendously, sending the entire economy into a state of mass panic.
- Stock Market Glossary — Keep this guide handy to look up any stock-related words or phrases that you don't know.
- Animated Stock Market — Watch an animated cartoon that explains how the stock market works.
- Stock FAQ — Read the answers to questions that kids often ask about stocks and shares.
- Stock Market History — View a timeline of the New York Stock Market and see how it has been affected over the years.
- Kid Investors — What do kids need to know in order to start investing?
- Making Money with Stocks — Learn how people can trade intangible stocks to make
- Meet the Centsables — Learn about important stock market concepts from the investing super-heroes, the Centsables!
- Stock WebQuest — Embark on an exciting webquest to see how basic math principles tie into the stock market.
- Stock Portfolios — Learn all about stock portfolios and the information that they convey to traders.
- Practice Investing — Imagine you receive $10,000 and were asked to invest it in stocks!
- Creating a Portfolio — In this online mission, students learn how to research and create their very own stock portfolio.
- Stock Market Quiz (PDF) — Take this printable quiz to see how much you remember about stock market concepts.
- The Early Stock Market — This activity will help students learn about numerous stock market crashes during the early 20th century.
- Wall Street — You've probably heard the term "Wall Street" several times, but do you know what exactly it is?
- Bonds and Stocks Pop Quiz — Let's see how well you know stocks, bonds, dividends and other trading terms.
- Virtual Investing — What would you do if someone were to suddenly give you a large amount of stocks today?
- Stock Market Activities — Browse through several fun resources to learn more about the NYSE and trading stocks.
- The Investment Club — Join a pretend investment club and prove that you can be successful at mastering the stock market.
- A Stock Comic Strip (PDF) — Download and read a funny comic strip that explains how the stock market came to be.
- A Stock Mission — Try a webquest to learn about the history of the stock market, how it works, and how to invest.
- Stock Market Game — Play an online game that allows you to practice trading stocks with virtual money.