Wall Street :

What is "Wall Street"

Wall Street is a street in lower Manhattan that is the original home of the New York Stock Exchange and the historic headquarters of the largest U.S.  brokerages and investment banks. The term Wall Street is also used as a collective name for the financial and investment community, which includes stock exchanges and large banks, brokerages, securities and underwriting firms, and big businesses. Today, brokerages are geographically diverse, allowing investors free access to the same information available to Wall Street's tycoons.

Introduction to Wall Street 

In the last lesson, we established the reason stocks came into existence. In this essay, we are going to examine how the stock market actually works - everything from what drives stock prices up and down to how stocks are purchased on an exchange. Perhaps more importantly, we will discuss one of the most important concepts of all, an allegory created by Benjamin Graham called Mr. Market.

Before we do, though, I want to take a moment to recap and expand on what you already know by talking about Wall Street.

 I want to explain to you what Wall Street is, how it functions, what it does for civilization, why it is important, and ultimately, how that matters to you, not only as a citizen but as an investor.  By building this foundation, it will make it easier to understand the things we discuss later, answering questions that you won't even realize you are going to have.  Before we begin, it's important for you to know that the term "Wall Street" has really come to mean two things in modern vernacular.

1. The term Wall Street is used to describe a physical location.  There is an actual place in lower Manhattan, home to the New York Stock Exchange and many important financial institutions, a not-insignificant number of which have been around for centuries, that is physically called Wall Street.  It is an actual location where you can go and stand surrounded by offices that collectively control trillions of dollars in wealth.

1. The term Wall Street is a metonymy for capital market finance.  Wall Street is frequently used as a figure of speech to describe a person, institution, or activity tied to high finance and banking.  If you look at an asset management company such as American Century in Kansas City, it oversees more than $1 trillion, mostly through mutual funds and institutional relationships.  It is located in the heart of the Midwest, surrounded by plains a few miles out from its impossible-to-miss headquarters at the Country Club Plaza.  It is nowhere near Wall Street physically but it's very much a part of what people think of when they discuss the activity of portfolio managers, retirement plan administrators, and such.