The stock market is one of the oldest recorded financial markets, with stock
exchanges appearing as early as the 1800s. While the way we trade stocks may
have changed radically over the years, stock trading as a form of investment has
proven to be a timeless and steadfast notion. Offering a wealth of investment
opportunities, the stock market today continues to grow in popularity, attracting
more and more investors worldwide.
WHAT EXACTLY ARE STOCKS?
Stocks, also known as shares or equities, are financial instruments. In legal terms,
they indicate ownership in a company and a person’s rights to a share of the
company’s assets and earnings. In financial terms, the value of a stock represents
the price at which ownership in that company can be bought or sold.
WHAT IS A STOCK EXCHANGE?
A stock exchange is essentially a platform for buying and selling stocks. A stock
exchange has two essential roles in the market. It’s first role is to act as a place
where companies can list their stocks and sell them to the public. This is how
companies can raise funds and make money on the market. The stock exchange’s
second role is to act as a place where people can then trade stocks after the initial
sell-off. This is how investors benefit from being on the market.
WHERE ARE THE STOCK EXCHANGES?
There are major stock exchanges in countries all around the world. Some of the
largest and most famous stock exchanges include the New York Stock Exchange,
the Japan Exchange Group, the Shanghai Stock Exchange, the Hong Kong Stock
Exchange, and the London Stock Exchange Group.
WHAT STOCKS CAN PEOPLE TRADE?
Facebook, Twitter, Netflix, Microsoft, Amazon, Apple, just to name a few. The truth
is, there are lots of stocks out there. The New York Stock Exchange, for example,
trades stocks for over 2,000 companies. And it covers a wide range of industries
with companies including Walt Disney, Coca Cola, Ford, Visa and Morgan Stanley.
As you can see, with so many exchanges and so many brands to choose from,
investors have many options.
WHAT AFFECTS STOCK PRICES?
Stock prices are influenced by supply and demand. When many investors want
buy a stock, the price rises, encouraging present stockholders to sell their stocks
for a profit. However, when many investors want to sell a stock and buyers are in
short supply, the price stock price drops.
There are many things that can cause high demand for stocks. If a company
produces unexpectedly high profits or if the company’s sector suddenly becomes
more popular, then buyers may rush to buy the stock. Alternately, there are also
many things that can cause low demand for stocks. For example, sellers may sell
shares if a company reports losses, if an economy is entering a recession, or if they
simply wish to cash their holdings.
WHAT NEXT FOR THE STOCK MARKET?
With so many stocks to watch, keeping on top of the stock markets can be
challenging . If you think you might like to find out more about recent trends, why
not join our free Telegram group? It has plenty of educational content, as well as
the latest financial market new.