Earning And Saving does not seem to be as challenging as investing and protecting. Stock market investment is intimidating as the ups and downs are unavoidable. Investment accompanies risks. Nevertheless, you cannot say it is 100% risky. The thought of stock market investment can be made less overwhelming if you realize how it works?
The stock market is a regulated and secured auction house where purchasers and sellers trade investments and negotiate prices. The stock market has a network of exchanges, where organizations big and small list their shares. Investors buy and sell shares among one another. You can read ‘The Private Investor’, a weekly magazine where long-term investment tips are offered for wealth creation based on the book of Dr. Max Otte.
Major stock exchanges
- NYSE
- NASDAQ
- Hong Kong Stock Exchange
- Shanghai Stock Exchange
- Tokyo Stock Exchange
How global economy impacts the stock market?
Interest rates, social factors, political environment, changes in investor’s preference, and trends are some aspects that impact the stock market. Nevertheless, worldwide financial changes can dramatically affect the stock market.
When people feel that the economy is about to turn in the opposite direction they start selling their stocks and in the opposite situation, they start buying shares. They tend to take extra risks to earn great rewards.
Public stocks
- Common stocks – Investors own a share in the company, which means they get voting rights.
- Preferred stocks – Investors get a fixed dividend that the company distributes before common stock shareholders get paid out.
Stock classes
There are Class A, Class B, and Class C stocks. Shareholders with Class A stock mean they have more voting power than shareholders with Class B stock.
Market participants
- Primary market – Companies directly sell their shares to the investors
- Secondary market – The trade is between investors, where no companies are involved.
- OTC market – If companies don’t or cannot fulfill the major stock exchange standards, they choose the OTC market.
If you plan to enter the stock market take time to learn bankroll and risk management techniques.
