Shares are a share in ownership of a company. It's a way a company can raise money to invest in the business. It could borrow money from a bank, but another way to do it is to issue shares. Any company can do this. And once the shares exist, they are a thing that can be bought and sold.
Shares in big companies are traded on the Stock Exchange and the price of each company's shares will go up and down depending on what people are prepared to pay for them. If the company does well, the price goes up. If the company does badly, the price goes down and in the worst case, it goes bust and you've lost your investment because now the shares are worth nothing. Your aim in investing in shares is to buy them at a good price and sell at a profit when the price (hopefully!) goes up.
Think of any big business you've heard of. Supermarkets, perhaps. If they are a limited company, you can buy shares in them and get a share of the profits when they pay a dividend, usually twice a year.
To buy shares, you need a stockbroker to do it for you. They charge a fee for buying or selling so the more you can invest in one go, the cheaper it is. Your bank can do this. If you need your money, you turn the shares into cash by selling them.
How do you choose? Do your research and see what looks good. Read the company accounts. This really is a big subject and worth getting a good book on.
A small profit on selling can be wiped out by fees especially if you only have a small amount. And the usual advice is to spread your money around in different companies so if one goes badly you haven't lost everything. This is why unit trusts exist. What a unit trust does is pool your money with other people's money to make a big fund, and the fund manager can buy shares with the fund and save on fees by doing really big trades. That takes the choice away from you but there are lots of different trusts each specialising in what general area of the stock market you want to put your money into.
One kind I like is index-tracker funds. Have you heard of the FTSE stock market index? It's a measure of how the stock market is doing and often gets quoted on the news. It puts together all the biggest UK companies and measures how their share prices are changing. What a FTSE index-tracker does is just buy shares in all the companies on the index so the manager doesn't have much thinking to do and the fees are really cheap. It tends to do better than 75% of other funds (which rather makes me think that doing your own thinking about what shares to buy isn't worth doing a lot of the time!)
I think you might learn a lot from http://www.fool.co.uk/ I did.
1) You buy and sell shares on the stock market. Buy low, and sell high.
2) All kinds of public businesses. Check on the company's website. If they have a stock ticker, you can buy shares.
3) You can buy shares from a bank, yes, if they provide investment accounts.
4) Yes, you sell them back out.
5) Research, and faith. If you lack either or both, buy into blue chip companies and hold the position for a long time (well reputed companies that probably won't ever fail).
6) You buy the shares from a brokerage or bank.
7) Unfortunately, no. Arbritrarily, I would say that 80% of "investors" who delve into the stock market expect to fail, and only about 30% of that 80% realize something is wrong and actually attempt to research and correct what they're doing. The issue mostly boils down to poor research and impatience, and being scared when attempts to profit, fail.
Stocks are a way for many people to own a business at the same time. Instead of just one or two people as owners, thousands of people can own the company. Each stock certificate represents a tiny bit of the company. The stock system allows you to easily sell your ownership in a company.
Most people buy stock from a stock brokerage... Like a bank, but different. Most major banks have partner companies to provide brokerage services for their customers.
Companies that offer stock are generally large and use the offering of stock to generate money for the company.
To buy stock, you give some money to a brokerage and they put it in an account. You can then ask them to buy the stock for you, using that money they are holding for you. Once you own it, you can sell it anytime you want. I use an on-line service to buy and sell stocks and I also own some in a retirement savings program that takes a bit of my paycheck and buys some stock automatically every week so when I retire, I'll have some money to live on.
There are many reasons to own stock, but most people are hoping to make money. The value of stock is constantly changing, so people hope to buy it when it is cheap and sell it later when it is expensive.
Questions i like to be answers:
How do stocks work?
What type of businesses can you get stocks from?
Can you get stocks from a bank?
Are you able to turn your stocks into cash?
How do you choose what business you would like to invest your money into?
How do you obtain the stocks?
Are people mostly successful when going into stocks?
