You've probably seen pictures of the stock market on TV: a big room full of paper scraps on the floor, a bunch of people in white shirts running around like mad and waving their arms like crazy. It looks like complete chaos, but it's not - it's the stock market! The stock market is a place where shares of "stock," little shares of the ownership of a company, are bought and sold. Buying one share of Company X means that you actually own a teensy weensy part of the company! Cool!

There are three widely known stock exchanges. They are The New York Stock Exchange (NYSE), the American Stock Exchange (AMEX), and the National Association of Securities Dealers Automated Quotation System (NASDAQ). The actual selling and purchasing of stocks takes place all around the world, in investment and brokerage companies. These companies then buy stock at one of the stock exchanges.

Buying stock is a way of buying a small part of a company, so that as the company grows, the worth of the stock also grows. The growth in the stock's value is why people buy stocks. The average stock grows by about 10 percent every year, meaning if you were to buy a ten-dollar stock, your stock would be worth around eleven dollars in just one year. The idea is that as the company you have invested in grows and makes a profit, the price of the stock will go up in price. If you make the right decision and the company you invested in is successful, you will most likely make a good profit from the purchase of stocks. That's why researching a company before you buy their stock is a very good idea.

When you decide the time is right, you can sell your stock and get some money back. Hopefully, you get more money than what you spent in the first place! If you do, you make a profit and then decide what to do with that money --- spend it, save it or invest it all over again!

Did You Know?

The Stock Market hit an all-time high of 11,722.98 on January 14, 2000!