![]() ![]() This typically is directly effected by how the company is performing financially. On the other hand, as more people are looking to sell a stock, the price goes down. As demand for a stock goes up, so does the price. Stock prices are dependent upon the concept of supply and demand. Investopedia has a superb article on this, which you can read here. If a stock price goes too low, investors, who have ownership in the company as a result of their shareholder status, will seek changes. Interestingly, after an IPO, companies do not make money off of their stock, and only care about their stock price to please their investors. This allows members of the general public to have ownership in companies. In an IPO, a company agrees to sell a certain amount of ownership in their company in exchange for a pre-set price. A company initially decides to “go public,” or offer stocks, in a Initial Public Offering, or IPO. When you purchase a stock, you are purchasing ownership in a company. The most well-known type of security are stocks. At the end of the day, the goal of investing is to sell your securities for more than you bought them, leading to a strong return on investment, or ROI. Many retirement funds are made up of securities, as as the value of the securities increase, the value of the retirement fund increases. People invest as a way to supplement their income in the long term. While the term “securities” can seem confusing, it represents a wide range of forms of investing such as stocks, mutual funds, and bonds. In personal finance, investing is the purchasing of securities in the hope of selling them later on for a profit. A company can invest in a new factory to increase production, or a invest money in research to hopefully find a new, successful product. ![]() In business the term “investing” can have many different meanings. Properly done, investing can be one of the most powerful tools in your personal finance toolbox. Introduction: Investing provides an alternative income source to wages, but it comes with a series of risks. ![]()
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