Stock Market Simplified

Business Magazine

The stock market is expected to be highly volatile in 2021, with many bumps ahead, yet the market is gaining high traction among people.

 

  • The stock market offers Initial Public Offering (IPO) of their shares in a stock exchange, instead of finding investors one by one.
  • Investors can buy and sell shares in secondary markets such as NYSE (New York Stock Exchange).
  • Investors indulging in stocks might be large entities like banks or single individuals.
  • All the stock exchanges, trading and sales & purchases takes place during trading hours from 9:30 am to 4 pm.
  • Stock market prices keep fluctuating as per the demand and supply, confidence of investors, ongoing world events and other factors. 
  • The stock prices go higher when limited shares are available in the market at a given time but demand of buyers is high. 
  • The volatile nature of stocks can be risky and traders must not lose momentum while trading stocks. 
  • As the market is unprecedented, the stock prices keep fluctuating.
  • Most companies’ shares appear on a stock ticker in the market showcasing the stock prices and trading volume. It also represents the difference between the current price and the end of the previous day. 
  • A start-up can raise capital investment by shares by equity financing or debt financing. Debt financing requires assets to pledge for loans along with interest on loans posing financial burden. Therefore, equity financing is a preference of start-ups. 
  • Electronic communications networks (ECNs) allow trading through electronic portals. E-trading allows the users to automatically match the order with the best available price. ECN allows off-the-floor stock exchange trading. 
  • There are two main types of stocks. The common shares have higher magnitude and volume than that of preferred stock.
  • Preferred shares have preference over the common shares in a company to receive dividends and assets in case of a liquidation.
  • Stock market provides higher returns over a longer period of time. On an average the stock market is noted to hike around 8% per year. It leads to around 2% for highest-yield savings accounts. This is called Stockholders equity.
  • A stock price can drop, risking a valuable loss. The market requires up to date knowledge to stay on top of the course. 
  • Stocks are one of the great ways to secure savings for retirement by investing when young. 
  • It is important to choose a well educated investing strategy before putting a bet in the stock market. Researching properly decreases the risk of vulnerability and losses.
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