The stock market

• Stock market


  A place where shares in companies are bought and sold
• Investor


  Someone who buys shares in a company
• Shareholder


  Someone who owns shares in a company
• Dividend


  A share of the company's profits paid to shareholders
• Speculation


  Buying shares in the hope of selling them later at a higher price to make a quick profit
• Speculation can be dangerous as you can lose a lot of money
• Buying on the margin

  Buying shares with money borrowed from a bank, using the shares as collateral
• In 1920 there were 4 million people who owned shares, by 1929 there were five times as many
• Even the president, Herbert Hoover, pointed to the stock market as a way of helping to end poverty in the USA in 1928
• When a company does well and makes good profits


  The share price becomes more valuable
• When a company is doing badly

  The shareholder may not be able to sell their shares as no one wants to buy them
• Shares are bought and sold on the stock market, which is located on Wall Street in New York
• The price of shares in a company is determined by the stock market
• Investors can make money from the stock market in two ways: receiving dividends and selling their shares for a higher price than they paid