THE STOCK MARKET

Stock exchange - a market where various securities can be bought or sold.

Stock - a share of ownership of a company. When you purchase a certain number of shares, you buy them at a set price, and as the company grows, your shares do as well. You can sell shares at a later date, profiting off growth.  Companies issue shares in order to help the company grow.  One negative of this is that the company is continuously subject to shareholders' approval. Private companies can also issue shares, however, are not required to report progress as often. 

Selecting an investment - First, do your research. Consider the company's business plan, volatility, financial ratios, and the economic environment. The environment the company desires to grow in can have profound effects on its success. For example, during the Covid-19 Pandemic, the economic environment changed drastically, favoring certain securities over others such as digital entertainment and video game stocks as a result of people staying home. In addition, the food, retail, and transportation industries suffered due to behavioral changes.