[monkey grunting]
The Stock Market can seem like a pretty complicated beast.
In fact, with all the news around it and the different experts
that are there to help you navigate the stock market,
it seems extremely daunting,
and it seems like the only way you can succeed
investing in the stock market is with the help of an expert.
But it's really not that complicated
if you take a moment to think about what is actually going on.
The weird part about the stock market, though,
is that you can make and lose money from what seems like nothing.
Not much physical is actually happening,
but tons and tons of money is being made daily,
and tons and tons of money is being lost daily.
In fact, the New York Stock Exchange trades over $169 billion a day,
and this is only one of the many stock exchanges around the world.
And of course there are many different types
of investments you can invest in.
For example, you can invest in currencies,
which has a much higher amount of money that is being traded daily.
It's in the trillions.
Anyways, the stock market is really similar to any kind of market -
a farmers market, a flea market,
anything were goods are being bought and sold.
And what it actually is, is just that,
except it's not goods that are being bought and sold,
they're called securities.
Securities are basically just a fancy name for financial assets
or things that you can make money with. For example, stocks,
which are probably the most well known form of security,
but you can also invest in bonds and commodities
such as gold and silver and metals,
and you can invest in real estate.
And there's tons of different kinds of investments like that.
When you are buying a stock,
you are actually buying a small part of a company.
And back in the old days you would actually get a piece of paper
that told you how many shares of this stock you bought,
once you had bought it.
However, now everything is digital so when you buy a stock
the only way that you can really tell that you have any part of
this company is through your online accounts.
So, for example, if you are interested in buying Google,
and let's say you buy just 1 or 2 shares or whatever it is,
you're actually investing in the company and become, in a way,
a part owner. It could be a very very small part owner,
but you do have some rights that are given to you as a part owner.
Now the question is, what happens
when you're selling or buying a stock? How does that actually work?
Well actually the first thing that happens
when you buy yourself a stock is
you set the price at which you're willing to buy or sell it at.
And you then use a broker who goes out and finds someone
who is willing to buy the stocks
that you're trying to either sell or buy
at the price that you have asked for it to be bought or sold.
Now the broker, once they find that person
who is willing to buy or sell at your price,
will make the transaction happen and will charge you a fee
of usually around $10-$20 these days,
if you're using an online account,
and will then make the transaction happen.
Millions of these kinds of transactions happen daily.
And this is really the reason that stocks go up and down.
So when you look at a stock chart of a certain stock,
let's say it's Google and Google has been
trending down over the past couple of weeks,
this is because sellers who are trying to sell their stock,
will sell at a lower and lower price,
or it can happen when a buyer will only buy a stock at Google
at a lower and lower price.
And this happens for a number of reasons.
It could be investor reports that are looking negative,
or bad news about the company,
or scandals around the company etc.
People basically when they get scared,
they try to protect their loses by selling,
and if they're selling at a lower and lower price,
or noticing that buyers are only going to buy at a lower and lower price,
they may get scared and try to get rid of their stock,
and this is what happens when stock prices go down.
Now, stock prices go up when the opposite occurs.
When buyers are willing to buy stocks at a higher and higher price
because they feel optimistic about the company,
or good news has been happening around the company,
and this pushes the price up.
It's really, if you notice, human psychology
that drives the prices of stocks.
So, that's really the basics of how the stock market works.
You can think of it just like a market where goods are being sold
and the price is really determined on the consumer,
and in the stock market the price of stocks
are really determined by investors.
Money is made from basically the speculation of money.
It's that simple.