Stock market explained to kids

A stock market is where stocks (pieces of ownership in businesses) are bought and sold. It usually refers to the exchanges where stocks and other securities are traded. The two best-known stock markets in the U.S. are the New York Stock Exchange (NYSE) and the Nasdaq. When people talk about the stock market, they usually mean the stock market indexes. The best-known U.S. stock market index is the Dow Jones Industrial Average (DJIA), which shows how 30 large, publicly-owned companies have traded during the day. The Nasdaq Composite Index, on the other hand, tracks the performance of over 3,000 companies that trade on the Nasdaq stock market. Stock markets can be volatile, which means their prices can go up and down a lot. When the stock market goes down, it's called a bear market. When it goes up, it's called a bull market. Most people don't buy stocks directly from the stock market. Instead, they work with stockbrokers, who buy and sell stocks on their behalf. When you buy a stock, you become a part-owner of the company. If the company does well, the value of your stock goes up, and you can make money by selling it. If the company does poorly, however, the value of your stock goes down, and you could lose money. The stock market can be a good way to make money, but it's also risky. Before you invest, you should learn as much as you can about how the stock market works.