How does the stock market work?

I was talking about stocks with my Economics teacher earlier today actually. I don’t own any shares myself, but apparently from the age of 16 onwards you can trade shares on the stock exchange, but if you have little experience it’s recommended that you trust a stock-broker to handle it for you. The basic principle is that as a company gains a larger market share and bigger profits their shares go up in value. The idea is to buy shares when they are low value and sell them when they are high. Experienced stock handlers can predict trends in different stocks and then buy stocks according to these. Also, when a company makes a profit it pays out dividends to each stock holder, the amount depending upon their level of investment - the higher the profit, the higher your returns. Holding shares can be a risky business as unexpected circumstances can cause you to lose everything overnight (e.g. the Wall Street Crash in 1929). In recent days more and more people in the UK are moving into the property business as opposed to stocks as it is more reliable and provides more protection for your investment, and also because of the current economic climate dipping in and out of recession. Hope this answers your question :)