In the late 1700's, some men signed an agreement stating that they would buy and sell stocks among them. They started by trading only one stock but the number has since grown to more than 3,000 stocks! What they started came to be known as a stock market.

The stock market is a place where people buy and sell equities. There is one main reason for the existence of the stock market, to raise money for government and businesses. It creates a place where people can either sell or raise money. In order to do this, both governments and businesses issue shares on the market. These shares are also known as stocks. Thus, the name of the stock market is fitting.

A stock is a certificate that shows you own a small fraction of the company which you have invested your money in. With the purchase of a stock, you are buying a small piece of everything that company owns. Once you have purchased a stock, you can be given the title of stockholder or shareholder. In essence, a stock is a representation of the amount of a company that you own.

When calculating the actual value of a stock, there are various ways of doing it. These can include:

While all of this havoc is true about the New York Stock Exchange(NYSE), it is a different story on the National Association of Security Dealers Automatic Quotation (NASDAQ). Here it isn't as complicated. The floor broker does not need to be running all over the place making trades. Everything is done electronically. With the push of a few buttons, the orders are sent to an electronic stock exchange where the stocks are bought and sold.

One kind of fee is called a "load." This is a fee that is payed on top of all the other fees. A "load" will range anywhere from 3-5 percent on average. When dealing with a "load," there are two different types, back-end and front-end loads. A back-end fee is when you go to take money out of a mutual fund. In order to retrieve money from a mutual fund, there is a certain percentage you must pay in order to do so. This is determined when you purchase the mutual fund. A front-end fee is just the opposite. It is the percentage of money taken out of your investment when paid into a mutual fund.

There are also other factors which can affect the prices of stocks in general. If interest rates are up, then stock prices will probably be down, and likewise for the opposite. When interest rates are high, then people feel that there is no need to invest in the market when they can make a steady income by leaving their money in the bank or buying bonds. Another one is the shape which the economy is in. If an economy has more money, than there is more money to be distributed into companies, which will raise the prices of the stocks. Many of the stocks are also seasonal which means that they will be up with relation to the time of year. Finally there is the amount of publicity that a company gets. If a company's name is in the headlines, then the price of the stock will probably be reflective of what is said of the company. If something good comes out of the article then the value of the company will probably increase whereas if something bad is said then the value of the stock will probably diminish.

When purchasing stock, while there are many different types, there are basically four different levels which you can consider. The lowest levels of stocks are known as penny stocks. These are small companies which are usually of no value and are given a very slim chance of making it big. A penny stock could be a local chain of stores, or a company that does not provide anything that customers are interested in.

Once all of the common stocks have been sold, companies will begin to distribute preferred stocks. On top of receiving their dividends prior to common holders, in the event that the company invested in dies, preferred stock holders will be refunded for their investment before the common shareholder. The major drawback of these less risky stocks is that when purchasing a preferred stock, there is a set dividend payment which means they cannot benefit as much from the companies profits. However, there are ways of getting around this setback. These shares have different classes. With the different classes come new characteristics, which include different market prices, restrictions, and dividend payment.

Third, there are the secondary issues. These companies can be considered to be well established. They can be relied on greatly to continue their growth and success. While finding these companies can be a hassle, if one is stumbled across, it makes for a great investment. The chances of profit increasing are quite high.

Of course, maybe some people like to go through the research on their own, without any help. These people would tend to a discount broker. These brokers do not do any research and do not give any advice, they simply just make the transactions which you request.

Although the commissions involved with mutual funds may not be as high as

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