Hello CYT!Welcome to this guide on how the Stock Market works! This guide is directed towards the newly implemented stocks plugin that we have, but considering how that reflects real time stocks you could in theory apply this knowledge to real life! Take that teachers who say video games are useless!
First, I would like to offer the disclaimer that I AM IN NO WAY A CERTIFIED STOCK BROKER. In fact, I've never even taken a class in school about stocks. However, I have done my own studying into stocks, so the information in here is simply a compilation of my knowledge. Take it with a grain of salt and don't hate me if you lose money!
WHAT ARE STOCKS
To kick things off, lets talk about the stock market. This plugin (I think) focuses on the New York Stock Exchange (NYSE) for its stocks. There are other various stock markets located throughout the world, and depending on your location will depend on a lot about said stocks. If you do any research into stocks, please make sure that you check only from the NYSE. Otherwise you will get information that is incorrect and won't help you at all.
What is a stock? A stock is essentially a sliver of a company. If a company is public, that means it is owned by the public via shares. A company's value is dependent on the price of its shares which can fluctuate depending on multiple factors. When one purchases stock, they are buying into the company and owning a *albeit extremely small* percentage of said company. Why do companies do this? There are a vast amount of reasons behind this, but a big reason is that a company can drastically increase it's value through going public.
HOW TO MAKE MONEY?
So, you want to own some of that stock. You now know that by owning shares in a company, you own a portion of that company. Now, what does this mean for you? Basically, you can earn or lose money by owning shares in that company. No, you don't get to make decisions for that company by owning that share *unless you become a MAJOR shareholder, but that would mean you purchased an astounding amount of shares which most likely aren't available to buy.* So, it's more so a form of gambling through business.
Lets say for example you purchase a share in Google (GOOG). A share for Google could be worth around $1000 USD. Lets say you snag some shares at $1000 a pop exactly. Google then releases a new update to Chrome that makes everyone fall in love with it. Suddenly, people are going to start buying up shares, wanting to get in on the action here. The value of those shares increases, and you can then choose to sell your shares in the company for a potential profit.
Now however, same scenario except that update to Chrome tanks its usability and everyone hates it. This obviously makes Google suddenly a less valuable company, and the stock value goes down. Now, one thing to keep in mind is that you don't lose money unless you decide to sell! If you hold out to see if the prices increase, and maybe even buy as it goes down, you could potentially earn profit in the future!
WHAT STOCKS DO I INVEST IN?
As for which stocks to invest in, that's truly impossible to say. The stock market fluctuates so often that I could list a stock now that could make you a lot of money, and they decide to do something that kills their value. Keep an eye on the markets, and make educated guesses. It's a gamble, so take your time doing some extra research! To find out a stock code, simply look up a company followed by "NYSE Stock Code" and it'll bring it up for you.
Good luck with your future investments, and let me know in game how its going for you!