I truly don’t know. And whenever an expert explains it to me, I get lost. There’s just something about the finance realm, where I can’t retain or grasp the full picture. I’m nearly 40 with a family. I want to be more educated in these kind of things. I would love a simplified breakdown.
Thank you in advance.
In: Other
You give money to a company called a broker.
The broker puts that money in an account.
You tell the broker–via the broker’s website– what stocks you want to buy by submitting an ‘order’. The order can be set to execute immediately or when a condition is met.
The broker uses the money in your account to buy the stocks from the market, and then puts those stocks in another kind of account, called a ‘portfolio’.
Later, you can tell the broker you want to sell the stock, at which point they sell it back to the market and put the proceeds in your money account.
Obviously that’s the simplest form of transaction and there are so many others, but that’s the baseline.
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