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Old 11-19-2009, 06:16 PM
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Default What is the stock market? How does it work???

i have no idea what it is and i have project on it???

What is it?? What do people do there? How does it work?????
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Old 11-19-2009, 06:18 PM
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The stock market is a market where stocks (shares in a company) are traded.

Stocks give several benefits to the owner:
1) dividend payments when the company makes profits
2) influence in the company's decisions
3) money when the stock is sold.

Shareholders will try to sell their stocks when they think the stock's company is going to do badly in the future and they will buy stocks of a company they think is going to do well in the future.

This is why, when today a company announces bad results over for example the month september, its index (stock price) will go down. Due to the bad results of last month, its shareholders are less confident it will get good results the coming month.
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