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A Kid’s Education in the Stock Market!

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Imagine you go to a food market. You buy a box of apples for $1 each. The next day, you open up a stall in the market and sell each of your apples for $2 each. At the end of the day you’ll find that you have doubled the original amount you spent. Perhaps some of the customers might realize that your prices are higher, and they’ll go elsewhere instead. The stock market works in a similar way, although stocks are not physical things. Instead, a stock represents a percentage of the company. For example, if a company has a hundred stocks for sale and you buy just one, that would mean that you own one percent of that company.

The great thing about the stock market is that you can buy stocks from many companies and sell them when you wish. People buy the stocks in the hopes that the company will be successful and make a profit. When this happens, the price of the stock rises, so each of the stockholders get a share of the profit. If they see that the business is not successful anymore, then they sell their stocks quickly, before the price drops too low. People who trade in the stock market use online tools and programs to help them monitor how the market in general is moving, as well as how individual companies are doing. Unlike our example, where a customer might just buy one apple, stock traders buy large volumes of stocks. To understand how the stock market works, it is also important to learn the basics about the economy as well.

Interested in the stock market? Explore the following resources to learn more!


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Greg Jensen

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