Corporations & Stocks
Corporations & Stocks Overview
In a Nutshell
Corporations are everywhere. You probably deal with thousands of them every day They're such a critical part of the American economy that you probably don't even notice or think about it.
But this wasn't always the case. When the United States was born, corporate charters were rarely granted. The benefits gained through incorporation were considered so great, they were offered only to businesses that served a broad public interest. A ferry company might receive a corporate charter, but an ordinary factory would not. If you proposed to build a canal that would link towns and expand trade, the state might grant you charter. But if you sought to incorporate your flour mill, you would probably be turned away.
Long story short: you could only incorporate if your business was going to do something very special to serve the public interest.
By the middle of the nineteenth century, however, these views had changed. Policymakers came to realize that the corporate form served all Americans by facilitating economic growth. For business owners, the corporation offered a way to increase both their capital and the stability of their businesses. For investors, the corporation offered a relatively risk-free way of taking part in emerging commercial opportunities.
Today, corporations bring in more than 80% of all dollars earned in America. Savvy stock investors participate in a global exchange worth more than $100 trillion. Corporations are here to stay, and they provide many of the best opportunities for individuals to get ahead in the world. Yet many people are left behind simply because they do not understand how to read a financial website. Are you one of them? Read on, and you won't be.
Why Should I Care?
Lots of people think corporations are defined by their size. They assume that they are gargantuan megabusinesses with thousands of employees and millions, maybe billions, in profits. But individuals can form corporations—your neighbor the accountant, your aunt the dentist, and your couldn’t-get-a-real job “life-coach” cousin Fred could all be incorporated. A corporation is just a type of business organization with specific legal and structural characteristics. Many corporations are among America’s largest businesses, but size is not a defining feature of the corporation.
So what are the defining features of the corporation? And what benefits do business people gain by incorporating? Perhaps most important—what’s in it for you? Read on and find out.
Meanwhile, lots of people think that the financial websites that track the stock market are a confusing batch of secret codes. They are intimidated by the jumble of numbers and symbols clearly meant for only the most sophisticated analysts. But most of these numbers are little more than price tags—today's price tags compared with old price tags—so that you can see how the market has changed. The stock market is complex, and money can be lost—but it’s not too complex for most savvy consumers to understand what's going on... and perhaps to profit.
So what do all those numbers about the stock market really mean? And what does all the jargon—margin, short, put call—really mean? Read on and find out.