Taking the very first step in the world of investing

Whether you are a newbie ready to jump in, a millennial apprehensive of the outcome of the first investment or a seasoned investor trying to reap profits, basics relating to how the stock market works are to be

learned by heart and drilled into mind.

This fact does give rise to the age-old and common query of how the stock

market works.For a millennial or a

newbie sitting patiently on the sidelines wondering how the stock market

works, the stock market must seem a lot like legal

gambling. As if it's all about placing the bets.

Select a stock haphazardly based on your instincts. If the price escalates, you become the winner, or else, you simply lose.

Now, is it that simple to get rich or lose every penny?

Quite regrettably, that's the common perception of the stock market, thought of as a temporary vehicle of investment that

brings enormous financial gains or shocking losses.

But the more you find out how the stock market works, more will you comprehend the exact nature of investment carried out in a

stock market, and you will manage your wealth wisely and smartly, like the wizards of investing.

• The aspects and happenings, the sheer ups and downs of the stock market can be mind-boggling, but a little knowledge can help alleviate your reservations.

• Before you know how the stock market works, know that a share of stock is plainly a share in the company ownership.

• And, you're entitled to a tiny or significant fraction of the company assets and earnings. 

• To know how the stock market works, know that everything the company owns, buildings, trademarks, branches, equipments, factories, machinery, all are included in the assets, and earnings are all the wealth the company achieves from sale of manufactured goods and services.

• Dividends are cash paid out to the shareholders, that is a fraction or percentage of company earnings.

• Brokers who help in buying or selling can well explain to a newbie how the stock market works. 

• Why does a company distribute amidst the general public its assets and income?

• Necessity of wealth makes it do so.

• Generally, there are two ways to gather money to make up for start-up expenditures or for business expansion, debt financing, or selling of stock, equity financing. 

Another fact that explains well how the stock market works, are the expectations of people, laws of demand and supply, earnings and performance of a firm, all these greatly affect the functioning

of a stock market.

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