The stock market is the place where people buy and sell shares in publicly traded companies. If a company is booming, its stocks will rise; if it’s struggling, they’ll fall. Stocks serve two important functions: they allow companies to raise money and give investors a stake in the company’s profits. The value of a share depends on supply and demand, with demand being driven by things like the company’s growth potential and how much other investors want to own it.
There are a few different ways you can invest in the stock market, including by buying individual shares of a company or through exchange-traded funds (ETFs). ETFs are basically funds that track a particular index, like the TSX Composite or S&P 500. They’re a good way to diversify your investments, because they can help you avoid being too exposed to any one company’s performance.
When it comes to investing in the stock market, there are a few rules that you need to follow. First, you need to know how much you’re willing to risk. There are regulations, called margin requirements, that determine how much you can borrow to buy a stock. In the United States, for example, you’re only allowed to borrow 50% of a stock’s value (plus a maintenance margin), so you need to put up at least that much cash if you want to make a purchase. Then, you’ll need to keep an eye on the price of the stock over time.
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