The Stock Market Game: Getting to Know the Basics and Avoiding the mistakes that led to

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What is Stock?

Somebody owns a share of the corporation . That is, they own a small percentage of a company; usually, less than ten percent.

What's most basic type of stock that the average citizen may own?

COMMON STOCK!

They have the right to vote on executive functions of the corporation, if they're voted onto the board of electors.

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The autombile industry was booming in the 1920's! You want should have bought many shares of General Motors! It wasn't the corporations fault for the market collapse, the banks were the problem.

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There was no telling how long General Motors would continue to prosper. Individual investors were ignorant to think that they could keep taking loans, and expect the banks to continue having the necessary resources to fund them. In the case of General Motors, investors should have been running to Wall Street to sell! Be smart and reserved when buying shares of a new corporation, in a brand new industry!

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In the case of General Motors, Bear was absolutely correct. The banks were giving new corporations too many loans. The problem was that they never received repayment for these loans. We call this, buying on credit. Credit is the the money that an investor(corporation or individual)owes to somebody else. On the contrary, the excess wealth that one ownes is called a debit. Remember, you want to be careful and safe when investing in a new market, industry, or product. This is because you don't have any evidence of which way the market will turn. Sure, people were thrilled to have motorized vehicles(instead of the horse and buggy);however, they didn't have the man power to produce enough cars for everyone who wanted them. Furethermore, they didn't have the available gas to keep their cars running. Overall, everybody can't keep living on credit because somebody has to pay for this!

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