Stock market definition
Definition: The stock market is just where shares of companies are bought and sold.
Lets take Walmart for example. We’ll say Walmart has 1 Billion shares of their company and the price of one share of their stock is trading at 50 dollars. That means that there companies perceived value is 50 Billion dollars.
Stock prices tend to rise 8-10 percent a year over long periods of time because companies usually earn 5 percent of their stock price a year and they generally grow their earnings at around 10 percent a year.
These days you can buy and sell shares of companies anywhere. Through a broker, on Wall Street, and most popularly on a computer.
You do not have to be a genius to succeed in the stock market and you do not have to be lucky either [even though luck does count]. You just have to be patient and rationale. There will be years in which you lose money in the stock market and you will be tempted to sell out and cut your loses. It is important to remember that everyone wins in the stock market over a long period of time. Just because the last year has been rough does not mean that the stock market is not a great investment.