What is the STOCK MARKET?

By Febyolla Goss

Febyolla Goss writes about Personal Finance for Children and illustrates all BUCK Academy book series.
Edited by Barbara Kindness, a Public Relations Specialist for Author.

Here is a way to explain it to children:

The stock market is like a big marketplace where people buy and sell tiny pieces of companies called “stocks” or “shares.” Imagine you really like a toy store, and you want to own a small part of it. If the toy store is on the stock market, you can buy a share, which means you own a small piece of that toy store.

When the toy store does well and makes a lot of money, the value of your share can go up, so you could sell it for more money than you paid. But if the toy store doesn’t do well, the value of your share might go down, and you could lose some money if you sell it then.

People buy and sell these shares every day, trying to make money by buying them when they’re selling for less and selling them when they’re worth more. It’s kind of like trading Pokémon cards, but instead of trading cards, people are trading pieces of companies!

REMEMBER – There is no instant way to get rich. It takes time, hard work, and always use your money wisely. Do not spend all of your money to buy STOCK. You can buy stock when you have extra money to invest after you fulfill your NEEDS.

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