1. Basic Questions about the Stock Market

2. Question #1 What is a stock?
Stock is a piece of ownership of a company.

3. Question #2 Why do people buy stock? PROFIT
If they have ownership in the company, through stock and the company earns a profit, they can share these profits. If the price of the stock goes up, the investor can sell it and make a profit

4. Question #3 What is a share?
A share is ONE piece of stock. It represents a very small percentage of ownership. Usually investors buy many shares in one stock (company)

5. Question #4 What is a stock market (exchange)?
A place where stocks are bought and sold. It may be physical (a building) or electronic (internet).

6. Question #5
What are the names of some popular stock markets (exchanges)?
TSX – Toronto Stock Exchange
NYSE – New York Stock Exchange - USA
NASDAQ – National Association of Securities Dealers Automated Quotations. - USA

7. Question #6 What determines a stock’s price?
How big and successful the company is (profits) Recent company news
The state of the U.S. and world economies
World events, whether good or bad

8. Question #7 What is a Bull Market?
Bull markets occur when prices are rising faster than average. It may last for months or years.

9. Question #7 What is a Bear Market?
Occurs when stock prices are falling faster than the averages. May last for months or years.

10. Question #8 What is a market crash?
Stock prices drop dramatically. One of the worst crashes was OCTOBER 29, 1929 – Black Tuesday – and led to the Great Depression

11. Question #9 Is your investment always safe in the stock market? No.
Why? You may not be able to find a buyer when you want to sell. If the company’s stock price falls or the company goes bankrupt you may lose all of your investment. Stock prices fluctuate – YOU MUST BUY LOW and SELL HIGH to make money.

12. Question #10 Why invest if you can lose all your money?
Historically, the market has advanced roughly 10% per year. Of course, this is an average and some years see better (30%) returns while other years suffer losses (-20%). However a 10% average is a much better return than keeping your money in the bank.

13. Question #10 Is the market always open to trade?
No. US and Canadian markets are usually open 9:30 am to 4:00 pm – Monday – Friday. Closed on holidays.