An Overview of the Importance of Stocks

As many of us already know a stock is basically a share of piece of a company or commodity and their main purpose is to raise capital and funds so that companies can expand, buy or build new factories, buy properties and in return for our investment dollars share profits with their shareholders.

These share companies sell on the market also have limitation within the number of stocks or shares they can sell, and their value is greatly influenced by supply and demand. If everybody wants in on a company, usually the price of its stock will rise, on the other hand as investors get wary and begin to sell prices tend to decline.

For those investing in the market, the act of buying stocks in done by those who have some level of belief that whichever company their investing in has a potential to grow and therefore make them money.

The market is constantly going up and down and acquiring stocks can be both risky and profitable, most new company stocks are considered a lot more dangerous that picking up stock from major companies like Apple or Sony, but the new companies on their way up also can produce a much higher gain or return.

Now not just any company can sell their stock on the market or be listed in major stock exchanges like the New York or London Stock Exchanges, before they can do that there is a lot of government paper work to be done.

In the old days those of us who wished to buy up a piece of any given company had no other choice, but to do so through a stock broker at our local bank. Issuing ordered to buy or sell certain stocks, Wichita were then executed by the broker for a commission.

One of stocks main advantages over your typical savings account has to be the fact of actually having a small piece of ownership of the company your investing in and as the business grows so does your initial investment. As companies profits grow, so do the value of their stocks and as revenue dwindles the stock suffers as well, so when first getting started in the stock market, understand stock market basics goes a long way.