What is the stock market?

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What is the stock market?

A stock market, Equity market, or share market is the aggregation of buyers and sellers of shares, Representing ownership claims on business; these may include securities listed on a public stock exchange.

The share is listed and traded on the stock exchanges which are entities of a corporation or mutual organization. The largest share market in the USA, by market capitalization, is the NYSE.

There are securities listed on stock exchanges as well as those only traded privately.

Stockholders are the legal owner of a corporation

  • They have a residual claim to all earnings and assets after debt and tax claims are satisfied.
  • Voting rights (e.g, to elect the board of directors )
  • Shareholders do not exercise control (elected board chooses CEO, etc)

Stock market Advantages

  • The stock market balances the regulations which are necessary for a proper flow of the economy.
  • It helps in facilitating the movement of money in one direction and the ownership via shares in another direction.
  • Stock markets are a way of transferring company control from less competent people to more competent people.
  • Market prices give the public a daily report on how well a company is run.
  • New stock and bond issues are important means of raising capital for capital investment.

How does the stock market work?

In the 1600s the Dutch East India Company employed yet hundreds of ships to trade gold, porcelain, spices, and silks around the globe. But running this massive operation wasn’t cheap.

In order to fund their expensive voyages, the company turned to private citizens’ individuals who could invest money to support the trip in exchange for a share of the ship’s profits.

This practice allowed the company to afford even grander voyages, Increasing profit for both themselves and their savvy investors. Selling these shares in coffee houses and shipping ports across the continent, the Dutch East India company unknowingly invented the world’s first stock market.

Since then, companies have been collecting funds from willing investors to support all kinds o businesses the stock market has schools, careers, and even whole television channels dedicated to understanding it. but the modern stock market is significantly more complicated than its original incarnation. so how do companies and investors use the market today?

The Stock Market is a common place where different buyers and sellers meet with their own market analysis and expectations.

STOCK SELECTION: The buyer selects the specific stock he or she is looking to enter into and looks for the seller selling such stocks at an appropriate price.

ORDER PLACEMENT: Trading can happen in multiple ways such as through web apps, terminal software, mobile apps, or even just by calling your broker.

FEES: Both buyer and seller pay respective fees to the associated party such as the stockbroker, the exchange, the regulatory body along with state and central governments.

PROFITS? Depending on the market movement, either one or both may make a profit (or even a loss) from this transaction.

The Basic guide to stock market shares

Buy Low, Sell High

Sounds so simple right? And yet investing is a rare part of our financial lives that feel like a bad thing.

A Sure Thing? A word to the wise, conventional wisdom isn’t always wrong, but it frequently has terrible timing.

Get Familiar with Filings: While some investors might think they have a sixth sense for finding good companies, there of us have to do our homework.

Think Long Term: Opportunities come when a stock or sector is dismissed by the market

languishes despite steady economic results that will produce long steam of profits.

There is no perfect metric: There is no single number that divides good stocks from bad ones.

Dividends are your friend: Dividends-paying stocks aren’t immune from declines, but they do offer a degree of insulation that others don’t. A word of warning through-rich dividends that look too good to last often don’t.

That’s all share market comment your feedback about this

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