Explain the stock market to a 5 year old.

Let’s think of the stock market as a valley of apple trees. Each apple tree represents a company.Some of the trees you’re allowed to pick from and others you aren’t allowed to. Each apple you get from a tree will be considered as one stock. The ones that you are able to pick from would be a public company. Some trees want to remain private because they’re not ready to be picked from and others prefer to remain unpicked. Once you buy an apple from the tree, you can keep it or sell it.

The owner of the tree may choose to grow his tree better or make it more special therefore increasing the value of that apple. The owner may do something embarrassing or harmful to the tree lowering the value of the apples produced. Overall, you can switch and sell your apples with everyone else who owns apples depending on if you think the price of your apple will go up or down. It also may be affected by the rain or weather, issues out of your control like macroeconomic factors. Make sure you take those into account when making your decision to keep or hold your apple.