What Are Stocks? Investing for Beginners Series with David Moadel
welcome to looking at the markets with David Modell I wanted to make a series
of videos for beginners because you should never be afraid to ask questions
even if they're beginner questions because we all have to start somewhere
alright and by the way I'm gonna tell you what a stock is today but if you
want more help putting together a trading or investing plan or you just
have questions about stocks and things like that and investing you can always
contact me my email address is down below it's David Modell at gmail.com
okay so what is a stock let's start at the beginning just to find what a stock
is well to put it very basically a stock or a share of stock is a small piece of
a company all right think of if you think of a company as a building then a
share of stock is kind of like one brick in that building alright if you bought
one brick out of that whole building then you own a piece of that building
and so when you buy one share of a company's stock then basically you're
owning a small piece of that company and most of the big companies that we've all
heard of like Apple or Amazon Starbucks McDonald's coca-cola and so on offer
shares of stock that people can buy and then they can also sell them all right
because you own it you can buy it and then you can sell it and the idea is to
hopefully buy a share or or more than one share you can buy one share of a
company's stock you can buy two shares five shares 10 100 1000 shares whatever
you can afford to buy you can all right and when you buy shares of stock in a
company the idea is that you buy the shares of stock at a certain price and
then you hope that the price goes up so that later on if you want to sell it you
can sell it for a higher price then you bought it and that way you can make a
profit it doesn't always happen like that
sometimes people buy shares of a company's stock and unfortunately the
price might go down and then if you sell it you'll be selling it for less than
you bought it and then you could lose money that way all right so be aware
there is risk in the stock market you can make money or you can lose money so
that's something to be aware of all right now as far as the price of a stock
what makes it go up or down well just like with anything else that people buy
and sell the price depends on what people are willing to pay for it at any
given moment all right so if you buy a company's shares of stock and what the
price you buy it at is going to be whatever the investors all the investors
collectively are willing to pay for it at that moment and if you buy it if you
buy shares of the stock and then later on all of the investors collectively
decide that they're willing to pay more for those shares of stock then the price
can go up and then if you want to sell your shares of stock you can and you can
make a profit that way on the other hand if you buy shares of a company's stock
and the investors all collectively decide that they're not willing to pay
as much for the shares of that stock then the price can go down so it all
depends on what people generally are willing to pay for those shares of stock
and that depends on a number of factors mostly on how the company is doing or
people's perception and sentiment their feelings about how that company is doing
at that moment all right and it's not always reasonable it's not always
rational the stock market is definitely not rational at all times and the stock
market is where people buy and sell stocks now remember you can buy stocks
and you can sell them pretty much whenever you want you can buy shares of
a stock and then hold on to it or keep it for a day and then sell it or you can
hold it for you can hold the shares for a week a month a year ten years thirty
years as long as you want some people buy shares of stock and then
hold it for their entire lives and then leave it
in their will to their children grandchildren when they pass away that
can happen all right so stocks have flexibility in terms of
time now there are exceptions like for example if you buy shares of stock of a
company and that company if it goes out of business for example and the stock
gets delisted or taken ock taken off of the stock exchange not able to buy and
sell anymore then you can lose your entire investment again there is risk in
buying stocks all right so unless still though unless a company
goes out of business or something happens like that something bad happens
you'll probably be able to hold on to your stock shares for as long as you
want and you can sell them or not sell them it's entirely up to you
now to buy stocks or shares of stock you have to have a broker or a brokerage
account but that's for a separate video I'll probably make a separate video on
how to buy shares of stock but just be aware you know you can't just go
anywhere and buy shares of stock you have to open up a trading or investing
account at a brokerage but you know that could be for a separate video all right
so just to recap stock shares a stock is our share of stock is basically just a
piece of a company alright and its value or its price is worth whatever all the
investors collectively are willing to pay for it at that moment and it can go
up or it can go down depending on a number of factors how the company is
doing financially how people feel about the company what's going on in the news
how the overall stock market is doing how the economy's economy is doing
things like that these can all affect shares the price of a share of stock
alright so this was a basic introduction to what a stock is I hope it's helpful
to you once again if you would like further help or more assistance with
trading investing stock whatever you can email me at that email
anytime it is David Modell at gmail.com and if you liked this video please give
it a thumbs up on YouTube and leave a comment and please subscribe to my
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updates whenever I put out more financial educational videos thank you
so much for watching and listening and I'll talk to you again soon