The Stock Market

Question 1

How did people make money during the 1920s?

Answer 1

• one of the most popular ways to make money - was the buying and selling of shares in companies. This was often called ‘playing the stock market’

Question 2

How did a share holder make money?

Answer 2

• most companies get money from investors. In return, investors own a share of the company - they become shareholders
• a shareholder makes money by: receiving a share of the company profits and selling their share for a higher price than they paid for it

Question 3

Why did more people play the stock market in the 1920s?

Answer 3

• during the 1920s, millions of ordinary Americans bought shares in all sorts of companies and made money by selling them
• in 1920, there were only 4 million people who owned shares. By 1929, there were five times as many
• many people bought shares with money borrowed from banks. They would then pay the remaining amount with the profits they made when the shares were sold