A stock is mainly referred to as capital that amounts from the allocation of shares by a company, business or corporation. In addition, we have a stock market. Since the stocks are in form of shares, we must have a stock market that plays the major role in enhancing issuing and trading in form of exchanges.
The stock market investment may seem as more of a terrifying experience, but in reality, investing wisely may result in huge profits, i.e. by investing in shares allocated by banks, societies, and other corporations. This is attributed to the fact that, this is a type of investment that is risk-free. The only problem is that ups and downs are experienced at times. As usual, for every beginner, there is always what we call the basics, which act as a guideline. Hence, we will now discuss the basics of the stock market.
Furthermore, we can elaborate more and say that the stock market can also be referred to as a trading market. This trade market is a source of information for passing messages from one trader to another. A set of rules are set aside, and the messages passed from one trader to another are transformed into prices among participants of the stock market.
The stock market is made up of direct investments and indirect investments. Direct investments involve buying shares in a single company thus resulting in becoming a shareholder. On the other hand, an indirect investment in the stock market involves investing in a group of companies as a way of spreading risk. Indirect investment is normally aided by the use of open-ended funds such as unit trust, which is made of shares from as many as 100 companies.
When a person decides to venture into the stock market, the term investor now comes in. An investor is an individual who seeks to spend money with the sole aim of making more money. It is evident to note that after investing, the returns are either negative or positive. As a result, it is … Read the rest...