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The Stock Market Before we can learn about how the exciting world of the stock market works we must first find out what the market is and maybe a little bit of history about it In the late 1700s some men signed an agreement stating that they would buy and sell stocks among them They started by trading only one stock but the number has since grown to more than 3000 stocks What they started came to be known as a stock market The stock market is a place where people buy and sell equities There is one main reason for the existence of the stock market to raise money for government and businesses It creates a place where people can either sell or raise money In order to do this both governments and businesses issue shares on the market These shares are also known as stocks Thus the name of the stock market is fitting A stock is a certificate that shows you own a small fraction of the company which you have invested your money in With the purchase of a stock you are buying a small piece of everything that company owns Once you have purchased a stock you can be given the title of stockholder or shareholder In essence a stock is a representation of the amount of a company that you own There are two main types of stock They are known as common stock and preferred stock There are many advantages and disadvantages two owning the two types of stock A common stock is the most common of stocks issued by corporations With the purchase of a common stock the dividends will be greatly influenced by how the company is doing If the company you invest in is doing quite well then likewise with your stock Where as if the company is hurting the stock will be going down just as hard Common stocks tend to be
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