Let's say you are a company and you need to raise some money. You can borrow it from a bank, or you can make an issue of shares. People who buy shares are part-owners of the company and will expect something in return for their investment, so they'll be expecting you to give them some of your profit each year - that's dividends.

Once the shares are issued, they can be bought and sold on the stock market, and the market price will go up and down depending on what people think of the company. As an investor, your aim is to buy shares in companies you think will do well, so that the price goes up and you can sell the shares at a profit. And get some dividends too, like getting interest on a savings account.

But the company might do badly, either because just it is having a bad time or the economy generally is doing badly. As we have seen recently with shops going bust - Woolworths has gone, Blockbuster videos has gone - and if you had shares in those, they are worthless and you've lost all the money you put into buying them. So it's a calculated gamble. If the share price goes down, do you think it's better to hang on and hope the price will go up again? Or cut your losses and sell before the price goes down even more?

So the usual advice is "don't put all your eggs in one basket". Spread your money around in several companies. And put at least several hundred pounds in each, because stockbrokers charge fees for buying and selling and that could wipe out your profit.

How can you get into it realistically with not a lot of spare cash? This is what unit trusts are for. Your money is pooled with other people's money and is in the hands of a fund manager who can spread it around amongst lots of companies. And that keeps fees down because the manager is able to buy and sell huge numbers of shares at a time. They are also employed to do this and have more time than you do to research and think about what companies are best to invest in. There are all kinds of unit trusts so you can choose what general area of the stock market you want your money to go into.

What actually does quite nicely, though, is FTSE index-tracker unit trusts. The FTSE index includes the 100 biggest companies on the UK stock market and all a tracker fund does is buy shares in all of those. So there is no thought involved and that makes it even cheaper on fees. And you can see how well it is doing just by looking at how the index goes up and down. 75% of the time, this gets better results than other unit trusts. If you want to "dip a toe into the water" of the stock market, it's a good way to start and I've done quite well out of it.

You can't do any of this until you are 18. Only a legal adult can buy shares or units in a unit trust.

The main reason for stock market is to raise finance for Governments, Local Authorities and Corporations. To be able to raise money on this Primary Market there needs to be an active Secondary Market where everyone trades stocks and shares between themselves). Only in tghe Primary market do the issuers get the money.

Markets also provide sttlement systems, price and news dissemination and regulate the markets and market participants.

Can someone please give me a brief and easy to read explanation on how stock markets work, how you can invest and how you can gaming and lose money. And how old you have to be to invest. Thenks.