What is the Stock Market?

CASH KID

This episode will explain the basics of the stock market. Hope you enjoy! Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

What is the stock market?

So you’ve got some cash. Maybe from an allowance, or that money your grandma gave you for your 7th birthday.

Here you go sweetie. Whoa, thanks grandma!

What ever it is, what are you going to do with it? Spend it, hide it away… or maybe invest it? Let’s start learning how to make that money grow.

Time to learn how to be a cash kid.

Hey, you guys it’s Cash Kid back again with another episode to help you become a cash kid yourself. So listen up!

Today we are going to talk about “What is the stock market?”

Now I will let you think about what you already know for about 10 seconds. Ready…. set… go!

Now that you have thought about it I will answer the question.

The stock market is a way for you to be a part owner of a company by investing in that company.

What companies can you invest in? Only those that are listed as publicly traded in an index.

Each publicly traded company has an index such as the New York Stock Exchange otherwise known as the NYSE or the Nasdaq and the big one… the S&P 500. But, I’ll talk more about those in another episode.

Alright, let’s break it down.

You can set a certain amount of money in the company depending on what the stock price is and you are now a part owner of that company. Now you took a risk when you set your money in that company. If the company does well you will gain money (yay!)....but if it doesn't go well you can lose money. (sad sigh).

When you set your money in, you’re lending the company money hoping the company does well….and if they do, you make more money.

There are different types of stocks and stocks can fall under different categories like, gold, silver, oil, electricity, nuclear power, medicine, books, and even groceries. More about that coming up.

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Now I will tell you about the difference between the primary market and the secondary market.

In order for you to invest in a company, it must be a publicly traded company. It’s issued an IPO or initial public offerings to allow others to start investing in a company… like you for instance.

The primary market allows companies to issue and sell their shares to the public at a set price… like $50 per share. To enable this process, the company will need a marketplace to sell, and the stock market provides this.

The stock market acts as a trading platform for trading, buying and selling of stocks. This is referred to as the secondary market activity.

The stock market maintains company announcements, news, and financial reporting accessible through their official websites.

Ok, I hope I didn’t overwhelm you. It will become clearer overtime as we start to talk to some stock market pros in future podcasts to break it down for us.

That’s it for now, see you next time. Remember anyone can be a cash kid but we got to learn how to become one. Cash Kid out!

Disclaimer:

The information presented represents the views and opinions of the guests. This show does not intend to provide personal investment advice through this podcast. This content has been made for informational and educational purposes only. To make a full and informed investment decision, we advise you to speak with a financial advisor and for kids, definitely your parents first before investing.