Recently, for a course I’m taking, there was a “field trip” to the Jamaica Stock Exchange .I actually didn’t go on the trip to the Stock Exchange because well….it just didn’t seem like an interesting field trip. Apart from the fact that I probably would have been sleep walking through the tour (if that’s what it was) I really didn’t understand the operations behind the “Stock Exchange.” What is it? How does it work how is it related to Entrepreneurship?
The stock exchange is basically a market through which company stocks (or shares if you will) are bought and sold.
So how the stock exchange works is, when a company makes shares available to be purchased they are called stocks. When a person buys said stocks, they become ‘owners’ of the company. In short basically. And as the company grows, the more valuable the share becomes.
It kind of boggles my mind as to the correlation between entrepreneurship and the stock exchange. I couldn’t find any articles online which explained this (none I understood anyway).
I did however find that there are good and bad times to purchase stocks. Apparently, 2008 was the best time to purchase shares in companies because that was the crash of the stock market and shares were going for a reduced cost. Depending on how well the company is doing, the more persons will be interested in buying shares; this clearly will result in shares going for high prices. The reverse I also true and when the number of persons interested in buying decreases and the sellers increase, the prices decline.
So now, if I buy shares in an organization, will I then get paid…? I mean, I do own a piece of this company now! Actually that is not the case, not always anyway. Some companies keep the profits to facilitate future growth while others will actually give you dividend (the profits per share).
There… I’m not so sure what I missed by not going to this ‘field trip’ but now I actually understand what the Stock Exchange is all about.