What are Stock Certificates?

A stock certificate is proof that you have invested in a company. You invest in a company, not a stock. Some people prefer to have stock certificates in hand to store in a safe place. Other people let the broker handle the certificates themselves. This way is a lot easier. You have to know that there are actually two different types of stocks. One is a preferred stock, and the other is a common stock. From now on, I'll be talking about a common stock, since it's the only one most companies issue. Remember that not every single company issues shares. A company must be a "corporation", a legal term, such as IBM, Toshiba, Wal-Mart, Disney, etc.

Why Do You Buy Stocks?

The single reason you buy stocks is to make some money. After all, the stock market is all about making money. If you buy a share in a company, and it ends up doing really well, you earn money on the share, since it goes up. The money you make off stocks is known as a capital gain. This is the difference between the price you bought it at, and the price you sold it at. If you end up losing money in a stock, you just suffered a capital loss. You make money in this market by buying these stocks at the lowest possible price, and sell it for a much higher price. It really is quite that easy. Of course, you never know when you'll lose money. Even well to do corporations have their stocks go down time to time. If you are lucky and buy a share in a good company, and it does well, you'll be awarded a high stock price. Though it won't always work out this way, you always take a risk when you invest in stocks.

Where trading stocks became popular

It all started in New York. This is where it became so popular. Long before when there was no stock market, you had people coming in from all over New York to trade stock around 1790, they use to meet every day on the weekdays under a large tree. The street where all this happened was called the Wall Street. And so this name stuck. People started hearing about what was happening on Wall Street, that everyone wanted a piece. Sometimes more than 50 shares of stock were traded. If you happen to think this is not funny, in the market of today, millions of shares are traded daily.