To make money on the stock market is to buy stocks of a company in the hope that it will perform well over time, which will increase the value of the shares. An investor can earn money on the purchase of shares in two ways at the same time: in the event of an increase in the price of the bought securities and of the payments of dividends. Ā Generally, stocks must be bought and sold through an intermediary called a broker, who takes buy orders and purchases them on behalf of the investor. Discount brokers, such as online services that charge minimal fees for stock trading, are a popular way to buy and sell stocks.
Although the average person generally invests in the stock market for the long term, hoping that the company's shares will rise over time, many professional investors buy and sell stocks constantly, sometimes even on the same day. Indeed, the value of the shares is determined by the demand for the shares, which may or may not completely reflect the actual performance of the underlying company. If there is a rumor that a certain company is going to fail, its actions could lose value as long as the rumor spreads - even if it turns out to be false. Long-term investment is normally the best way to avoid such artificial and sporadic fluctuations
In addition to being entitled to income from a share and the potential for profit if the value of the share increases, shareholders benefit from a number of other benefits. On the one hand, shareholders have the right to receive periodic updates on the performance of the company and may be invited to special events for shareholders. If a single investor owns a large share of the shares, they may be given a leadership role in the company, for example by exercising voting rights on the company's board of directors. Although the shares evoke images of stocks traded freely on the stock market, companies can also be privately owned, which means stocks are bought by a limited number of large private investors. It is usually impossible to buy shares in a private company unless one of them has significant assets or close internal ties to the company
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