The New York Stock Exchange. (theatlantic.com)
What Is The Stock Market?
Ideally, business owners have access to a limitless supply of cash that they hoard in a Scrooge McDuck–like vault, but most have to fund new ventures via more conventional means. They sell shares, a small percentage ownership of the company, as a way to get investment dollars to grow and expand their business. The stock market is like an auction house for the buying, selling, and trading of these shares, the value of which is determined by the worth of the company. If a company is doing well, the value of its shares increases. Investors make money in the stock market by identifying businesses with potential for growth, buying their shares when the price is low, and selling at a profit when the shares’ value goes up. Since the stock market is essentially just a marketplace of various companies, it’s inextricably tied to the U.S. economy.