Can anyone explain briefly how the stock market works?
This is a very basic answer. Stock represents a share of ownership in a company. When a company wants to raise money they issue stock. People can buy or sell shares in a company via a brokerage house or through the company itself. The people that invest in a company by buying shares are called the shareholders. The company promises to use these funds to grow the business and to become more profitable. As the company grows and becomes more profitable the stock price goes higher. This benefits the shareholder that invested in the company because they make money when this happens. If the company misuses the funds, the company does not grow, or the company declines the stock price goes down. This is bad for the shareholder because they either have to sell the stock or lose some or all of the money that they invested in the company.
