When retail investors discover TiiCKER, some have questions about how stock perks work. So the editorial team periodically digs into our mailbag to answer some common questions about TiiCKER. We want you to get the most out of the platform that rewards shareholders for simply owning stock in their favorite companies.
Question: “I’m 17 years old and new to investing. My grandfather bought me a few shares of stocks of some of the companies I love to get my portfolio started, which is how I discovered TiiCKER (thanks for the perks, Lionsgate!) Obviously, I know the companies I like, but I know next to nothing about investing or the stock market.
“I’m sure a lot of retail shareholders who have invested a long time will laugh at this question, but I hear the term ‘Wall Street’ used a lot when it comes to investing. The problem is, I don’t know what Wall Street is or what they are referring to. So my question is pretty simple: What is Wall Street and why should I care?” – Noah M., Tulsa, Okla.
Answer: Noah, when it comes to investing, there are no stupid questions. In fact, it is often the questions not asked that can get you in trouble when it comes to the stock market. So let’s talk about Wall Street. Wall Street is a literal place – a street in lower Manhattan that is home to the New York Stock Exchange (NYSE) and many of the major investment banks (both on Wall Street itself and in the surrounding Financial District).
But Wall Street is used to identify and describe much more than just the place. Wall Street is a term often used to describe the entire financial industry. Here’s a fictitious example that you might read in the financial press: “When XYZ Company reported less than stellar profits Wall Street punished the company by driving down its share price.”
Of course, Wall Street as a place can’t punish anything, much less a company’s stock, but the financial industry as a whole can. So when you hear about Wall Street being “upset” by a company’s financial performance or a federal policy that might affect share prices, it means the financial industry as a whole.
Wall Street can also be used to describe the companies that trade publicly on exchanges throughout the U.S. Here’s another made up example of how you might hear Wall Street used in this way: “Wall Street responded to the president’s plan to increase taxes on corporations in the U.S.” Again, the writer doesn’t mean the literal street, she means the companies that are publicly traded on the stock markets. Wall Street can also refer to the people that work in the financial markets, as in “Wall Street expects the war in the Ukraine to force up fuel costs.”
Wall Street is often shortened to “the Street” – a term frequently used by those in financial circles and the media. For example, when reporting a company's earnings, an analyst might compare a company’s revenues to what the Street was expecting. In this case, the analyst is comparing the company’s earnings to what financial analysts and investment firms were expecting for that period.
The history of the street itself is as interesting as how it is used. Wall Street got its name from the wooden wall Dutch colonists built in lower Manhattan in 1653 to defend themselves from the British and Native Americans. The wall was taken down in 1699, but the name stuck.
The area has been an important financial center since the 1700s. According to Investopedia, given its proximity to New York’s ports, the Wall Street area became a bustling center of commerce. Its origins as a financial center began in 1792, when 24 of the most prominent brokers and merchants in the U.S. signed the Buttonwood Agreement when they reportedly gathered on Wall Street, under a buttonwood tree, to do business.
“The agreement outlined the common commission-based form of trading securities,” according to Investopedia. “In effect, it was an effort to establish a members-only stock exchange. Some of the first securities traded were war bonds and the stocks of such institutions as the Bank of New York. Out of this acorn of an agreement, the oak that became the NYSE grew. In 1817, the Buttonwood brokers renamed themselves The New York Stock and Exchange Board. The organization rented out spaces for trading in several locations until 1865, when it settled on a location of its own, at the corner of Wall and Broad streets.”
So that’s Wall Street Noah. Keep on investing and don’t forget to tell your friends about TiiCKER where you can be rewarded simply for owning shares of stock in companies you already know and love.