Girls That Invest

4Stock market 101

I once knew an engineer. If you've had the privilege of knowing what engineers are like, you'll know they tend to be very curious. They always want to break things up and piece them back together. The engineer I knew couldn't work out one thing, however: they never could wrap their head around what on earth DNA is. No matter how many times I tried to explain it, they couldn't grasp the fact that DNA is made of wee little building blocks called proteins. These proteins get strung together on a ladder, and the sequence of the rungs of the ladder write your genetic code. Bigger proteins then read your code like a recipe and make you who you are.

DNA to the engineer is what the stock market is to a lot of people. No matter how many times it gets explained, it just doesn't make sense. How does it work? Where does the money go? No matter how many times we try to research it, it can be so hard to grasp. What does it mean, where do the men in suits who shout on the phones come into it? What are all the numbers on the screen and what are those red and green arrows for?

Well, it's time to crack the code about what the stock market is, and what better way to do it than with a classic lemonade stand analogy?

Sim's Lemonade

Imagine I own a lemonade stand. And since I'm a savvy business owner, let's imagine that the stand does extremely well. From the get‐go my stand grows immensely: people from far and wide come to buy my lemonade. Business is booming.

But there is ...