A useful guide to trade the stock market
The world we live in is a world full of opportunities. At present, you don’t need degrees or good marks to be employed. If you are smart enough to analyze the economy around you, you will discover that there are many unorthodox ways of earning money. Being employed is one of the basic rights of man and it helps a person to be self-confident by meeting his daily needs.
Being a doctor or an engineer are not the only options we have these days. There are several ways of being employed, especially if you are self-employed in the economic sector.
Today, we will be focusing on one of the biggest financial sectors where you can earn a living easily. You might have already guessed the topic we are going to introduce you to. That’s right, we will be talking about the stock market.
The stock market
The stock market is a financial sector where buyers and sellers gather to trade their stocks. The stocks can be anything related to business.
In the stock market, anyone can be the own stocks by buying shares. You must be aware that you need a huge amount of money to run a company. Running a business organization requires a huge amount of capital like an investment, employee salaries, service charges etc. Often, company owners don’t have enough liquid capital to run the said company. So, what do they do? In these cases, company owners sell the company shares in the stock market and anyone can be a shareholder by buying a share of the company and investing their capital in it.
Are you curious about how they make a profit?
Well, when a company tends to increase its profits over time, their shareholders also get a part of the profit from that company.as they would if they made another type of investment. You invest by buying shares and you gain a certain portion of profit based on the percentage of your share.
So, if you have 10% of the shares of a company, you will get 10% of the total profit they make. It’s as simple as that!
Characteristics of the stock market
Now that you are aware of what the stock market is, it’s time for you to learn some distinct features of the financial market.
- The stock market is the second-largest liquid financial market after the Forex market. Each day, the stock market deals with 4-5 billion of dollars all over the world!
- The stock market is run by an organized body. This organized body has a management committee as well as some particular rules they follow to control the stock market. The current stock market is mostly online-based after 400 years of evolution. You can easily buy stocks online due to significant advances in technology.
- In stock markets, all the companies that are selling their stocks are known as public companies. These companies are required to disclose all their financial information to investors.
- In the stock market, trading is mainly done through brokers where an employer-sponsored retirement investment funds are provided. However, you can also trade without brokers but, for that, you will need to sign up for an individual account.
- Public companies usually use a mechanism called IPO or Initial Public Offerings to introduce their stocks for public sale in the stock market. IPO is often considered as the primary market in this sector.
- Supply and demand play a vital role in influencing the stock market. The stock market can fluctuate very easily due to supply and demand. For example, if a company is gaining profit in their business, then many people become interested in buying their stocks. As a result, the value of the stocks rises.
The stock market offers a great opportunity for people to earn money by investing their additional capital. In the stock market, even if you fail to gain profit, you won’t lose all of the capital you invested.
So, do you think? Do you want to give it a try?