Author: Walker Lyall

The stock market is where winners are made and losers fall hard. Whether you are going for a quick profit or building a long term portfolio, there is inherent risk involved in investing any money into the market.

Americans have been taking economic risks since the U.S. stock market began over 200 years ago. In New York City during the late 1700’s, a small group of men met outside of 68 Wall Street conducted the first stock trades in the U.S. From then on, the exchange of stocks for money grew and the U.S. stock market exploded. Eventually, two main stock exchanges emerged to process the majority of stock purchases in the U.S: the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations (NASDAQ).

There is no doubt that the stock market has come a long way. Before the widespread use of computers, in order to buy or sell a stock, one would have to either physically be in the exchange building or make a phone call to a broker to execute the trade. The stock exchange buildings were separated into two sections; the exchange floor where only trade specialists and floor brokers were allowed, and the booths surrounding the floor, where brokers worked with clients. 

So how would it work? Imagine you are reading the morning paper and you see a stock at an appealing price. You make a call to your stock broker, assuming you already have one, and tell them you want to buy stock XYZ. Your broker then gets up from their desk and runs over to the booths that surround the exchange floor. A floor broker runs up to the booth and, after being instructed by your broker, writes down the stock order. The floor broker then runs back to the exchange floor, with your order in hand, and gives it to a trade specialist who finally executes your order. In the long duration of time that this whole process took to execute, the stock price may have changed, but your order will still be carried out.

The original process of purchasing stocks was lengthy and required multiple people, making the stock market a place only for those willing to jump through all the hoops. Additionally, in order to buy and sell stocks on the exchanges, you had to be 18 years old, making the stock market irrelevant to young Americans. This would all change in 2007 when the market went electric and the modern era of the stock market commenced.

Today, anyone with a smartphone can buy and sell stocks in an instant, including those under the age of 18 with parents’ permission. The best way to learn is to start trading stocks today. By trading with just a hundred dollars, you can educate yourself on how to manage larger sums of money later in life, whether that be your job or just personal finances. Many mistakes will be made at first, but it is important to lose now so that you can learn from your mistakes and have the knowledge to succeed when your own savings are on the line in the future.

References: 

Editors, L.A. Times. “NYSE to Allow Cell Phones.” Los Angeles Times, Los Angeles Times, 13 May 2003, https://www.latimes.com/archives/la-xpm-2003-may-13-fi-cell13-story.html. 

Hwang, Inyoung. “A Brief History of the Stock Market.” SoFi, SoFi, 11 Oct. 2022, https://www.sofi.com/learn/content/history-of-the-stock-market/.