WEBVTT FILE

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[monkey grunting]

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The Stock Market can seem
like a pretty complicated beast.

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In fact, with all the news around it
and the different experts

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that are there to help you
navigate the stock market,

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it seems extremely daunting,

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and it seems like the only
way you can succeed

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investing in the stock market
is with the help of an expert.

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But it's really not that complicated

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if you take a moment to think about
what is actually going on.

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The weird part about
the stock market, though,

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is that you can make and lose money
from what seems like nothing.

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Not much physical
is actually happening,

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but tons and tons of money
is being made daily,

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and tons and tons of money
is being lost daily.

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In fact, the New York Stock Exchange
trades over $169 billion a day,

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and this is only one of the many
stock exchanges around the world.

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And of course there are
many different types

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of investments you can invest in.

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For example, you can
invest in currencies,

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which has a much higher amount
of money that is being traded daily.

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It's in the trillions.

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Anyways, the stock market is really
similar to any kind of market -

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a farmers market, a flea market,

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anything were goods
are being bought and sold.

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And what it actually is,
is just that,

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except it's not goods
that are being bought and sold,

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they're called securities.

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Securities are basically just
a fancy name for financial assets

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or things that you can make
money with. For example, stocks,

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which are probably the most
well known form of security,

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but you can also invest in
bonds and commodities

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such as gold and silver and metals,

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and you can invest in real estate.

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And there's tons of different kinds
of investments like that.

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When you are buying a stock,

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you are actually buying
a small part of a company.

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And back in the old days you would
actually get a piece of paper

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that told you how many shares
of this stock you bought,

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once you had bought it.

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However, now everything is digital
so when you buy a stock

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the only way that you can really
tell that you have any part of

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this company is through
your online accounts.

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So, for example, if you are
interested in buying Google,

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and let's say you buy just
1 or 2 shares or whatever it is,

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you're actually investing in
the company and become, in a way,

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a part owner. It could be
a very very small part owner,

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but you do have some rights that
are given to you as a part owner.

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Now the question is, what happens

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when you're selling or buying a stock?
How does that actually work?

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Well actually the first
thing that happens

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when you buy yourself a stock is

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you set the price at which
you're willing to buy or sell it at.

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And you then use a broker
who goes out and finds someone

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who is willing to buy the stocks

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that you're trying
to either sell or buy

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at the price that you have asked
for it to be bought or sold.

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Now the broker,
once they find that person

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who is willing to buy
or sell at your price,

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will make the transaction happen
and will charge you a fee

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of usually around $10-$20 these days,

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if you're using an online account,

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and will then make
the transaction happen.

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Millions of these kinds of
transactions happen daily.

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And this is really the reason
that stocks go up and down.

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So when you look at a stock
chart of a certain stock,

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let's say it's Google
and Google has been

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trending down over
the past couple of weeks,

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this is because sellers who
are trying to sell their stock,

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will sell at a lower and lower price,

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or it can happen when a buyer
will only buy a stock at Google

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at a lower and lower price.

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And this happens for
a number of reasons.

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It could be investor reports
that are looking negative,

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or bad news about the company,

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or scandals around the company etc.

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People basically
when they get scared,

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they try to protect
their loses by selling,

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and if they're selling at
a lower and lower price,

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or noticing that buyers are only going
to buy at a lower and lower price,

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they may get scared
and try to get rid of their stock,

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and this is what happens
when stock prices go down.

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Now, stock prices go up
when the opposite occurs.

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When buyers are willing to buy
stocks at a higher and higher price

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because they feel optimistic
about the company,

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or good news has been
happening around the company,

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and this pushes the price up.

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It's really, if you notice,
human psychology

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that drives the prices of stocks.

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So, that's really the basics
of how the stock market works.

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You can think of it just like
a market where goods are being sold

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and the price is really
determined on the consumer,

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and in the stock market
the price of stocks

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are really determined by investors.

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Money is made from basically
the speculation of money.

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It's that simple.