Stock Market
What is the Stock Market?
The Stock Market is the place where investors buy and sell investments, such as stocks. The term usually refers to Dow Jones Industrial Average or any other major stock market indexes. Tracking each stock is not easy though. Therefore, those indexes include part of the stock market so that a stock’s performance is viewed as representing the whole markets. When referring to the stock market having moved lower or higher, we usually mean that stocks within an index have either gained or lost value. This movement in stock prices is what investors hope will eventually be their profit.
Stock Market
What is the Stock Market?
The Stock Market is the place where investors buy and sell investments, such as stocks. The term usually refers to Dow Jones Industrial Average or any other major stock market indexes. Tracking each stock is not easy though. Therefore, those indexes include part of the stock market so that a stock’s performance is viewed as representing the whole markets. When referring to the stock market having moved lower or higher, we usually mean that stocks within an index have either gained or lost value. This movement in stock prices is what investors hope will eventually be their profit.
Stocks – Definition
A stock, also known as share or equity, is a financial instrument showing ownership in a company, corporation or organisation and representing an analogous claim on what it owns (its assets) and what it makes regarding profits (earnings).
Owning stocks implies that the holder owns a portion of the company equal to the proportional number of the company’s shares in total.
For example, a shareholder with 100,000 over a company’s million shares, would have a 10% ownership. Most companies’ shares run into millions or billions.
Stocks – Definition
A stock, also known as share or equity, is a financial instrument showing ownership in a company, corporation or organisation and representing an analogous claim on what it owns (its assets) and what it makes regarding profits (earnings).
Owning stocks implies that the holder owns a portion of the company equal to the proportional number of the company’s shares in total.
How the Stock Market works
Investing in stocks is easy. To start with, the stock market gives buyers and sellers the opportunity to monitor and negotiate prices and trade as well. It works through a network of exchanges. What companies do through a process called an initial public offering, or IPO, is list shares of their stock on an exchange. In their turn, investors buy those shares, allowing the company to make more money and further develop its business.
Investors buy and sell these stocks amongst them while the exchange tracks the supply and demand of each listed stock.
How the Stock Market works
Investing in stocks is easy. To start with, the stock market gives buyers and sellers the opportunity to monitor and negotiate prices and trade as well. It works through a network of exchanges. What companies do through a process called an initial public offering, or IPO, is list shares of their stock on an exchange. In their turn, investors buy those shares, allowing the company to make more money and further develop its business.
Investors buy and sell these stocks amongst them while the exchange tracks the supply and demand of each listed stock.
Supply and demand will eventually determine the securities’ price and the levels at which investors and traders are willing to buy or sell. Those who buy offer a bid—the highest amount they are willing to pay and which is usually lower than the ask price—the amount sellers require for an exchange. The bid-ask difference is what we call the spread. Trades occur when buyers increase their price or sellers decrease theirs.
Stock trading used to take place in a physical marketplace. Nowadays however, the stock market happens online, via the internet and online brokerages. Trades occur on a stock-by-stock basis, but news, political events, economic reports and several other factors lead stock prices to move in a parallel way overall.
Supply and demand will eventually determine the securities’ price and the levels at which investors and traders are willing to buy or sell. Those who buy offer a bid—the highest amount they are willing to pay and which is usually lower than the ask price—the amount sellers require for an exchange. The bid-ask difference is what we call the spread. Trades occur when buyers increase their price or sellers decrease theirs.
Stock trading used to take place in a physical marketplace. Nowadays however, the stock market happens online, via the internet and online brokerages. Trades occur on a stock-by-stock basis, but news, political events, economic reports and several other factors lead stock prices to move in a parallel way overall.
Pros
Stocks can be either purchased individually via opening an account with a brokerage or through a retirement account, such as an IRA. Online brokers enable clients to open an account as well as buy and sell investments. Therefore, they act as the middleman between the shareholder and the stock exchange.
Stocks are a very good choice for the long term. Investing in the stock market for the long-term has evidently proven to be an efficient and profitable way to profit off over time.
Cons
Any investment involves risks, so do stocks. Stocks are even riskier, to be exact. However, they do carry a bigger reward potential compared to other assets. Although history shows that stocks usually tend to increase in value, they also have unexpected falls. very good choice for the long term. Investing in the stock market for the long-term has evidently proven to be an efficient and profitable way to profit off over time.
Stocks are not suitable as a short-term investment. It bears a strict deadline, which increases the chance for you to need the money before the market recovers losses.
Pros
Stocks can be either purchased individually via opening an account with a brokerage or through a retirement account, such as an IRA. Online brokers enable clients to open an account as well as buy and sell investments. Therefore, they act as the middleman between the shareholder and the stock exchange.
Stocks are a very good choice for the long term. Investing in the stock market for the long-term has evidently proven to be an efficient and profitable way to profit off over time.
Cons
Any investment involves risks, so do stocks. Stocks are even riskier, to be exact. However, they do carry a bigger reward potential compared to other assets. Although history shows that stocks usually tend to increase in value, they also have unexpected falls.
Stocks are not suitable as a short-term investment. It bears a strict deadline, which increases the chance for you to need the money before the market recovers losses.
