What is the stock market?

A market is a place where people come to exchange goods. Nowadays the largest market in the entire world is the internet and you constantly have websites competing with each other for business.

For example, vacation getaway sites, sites for clothing, sites for getting cheap airfare and even sites that compete for the amount of time you spend on them. Regardless of the business, the markets are created because consumers demand certain products and companies provide them.

Similarly, the stock market is just an enormous market around the entire world that deals with the same exact concept. Huge companies are trying to sell their stocks and maximize their profit margins for their consumer goods. People like me and you who are interested in increasing our wealth go out to the stock market and try to purchase certain shares as investments.

The majority of these shares though are usually purchased by companies that their entire purpose is to maximize profit margins. This usually includes hedge funds, mutual funds, and venture capital firms. I will explain all of these later on.

The stock market tracks everything that is basically sold in the world that’s legal, and can be easily converted to cash. This includes all types of oil ranging from olive to the type you put in your car, beans, gold, diamonds, silver, copper, and basically every single company in the world. There is also something called a call/put options which I will explain in later posts