The stock market is an integral part of the financial market in which securities are traded. Every day it attracts millions of investors who want to make money on their sale.
Instructions
Step 1
The stock market began its history in the 17th-18th centuries. Its formation was due to growing government spending on military purposes and the urgent need to attract borrowed funds to replenish the budget. That is why bonds became the first securities. The first stock exchanges appeared in Western Europe.
Step 2
Today, the volume of the world stock market exceeds $ 50 trillion. The list of the most developed countries in terms of the volume of securities trading is the United States, Asia-Pacific countries and Europe.
Step 3
The key purpose of the stock market is to redistribute available funds in favor of the most promising sectors of the economy. Companies and governments use the stock market as a way to raise funds for company development.
Step 4
Some investors have made huge fortunes in the stock market. The most striking example is W. Buffett. How do you make money on the stock market? It all depends on what securities are in the hands of the investor. If we are talking about shares, then they make it possible to receive profit in the form of dividends, or from the difference between the purchase / sale price. The value of shares may rise under the influence of favorable market conditions and the successful development of the company. Bonds have a fixed income. The advantage of investing in securities over other types of investment is the ability to get unlimited profitability, which can be several times higher than the profit from deposits. Moreover, this method of investment is highly risky.
Step 5
The stock market has its own structure. It includes investors, brokers and supervisors. The purchase of shares is carried out through special intermediaries - brokers. Three models of stock market operation have formed in the world. This is the Anglo-American model, where non-banking institutions act as brokers; German - here the brokers are banks and a mixed model, where banks and non-bank organizations can be brokers.
Step 6
The stock market is traded on stock exchanges. The largest stock exchanges are the New York, London and Tokyo stock exchanges. In Russia, the MICEX-RTS stock exchange is the leader.
Step 7
The stock market can be classified on various grounds. From the point of view of securities, a distinction is made between the markets for stocks, bonds and financial derivatives (for example, futures contracts). The issuers distinguish between the securities market of companies or government securities. According to the types of transactions, the cash (or spot), forward market, etc. can be distinguished. The stock market can be divided according to sectoral and territorial characteristics. Such a variety of investment instruments allows you to apply a variety of trading strategies and diversify your investment portfolio.
Step 8
By the nature of the movement of securities, the primary and secondary markets are distinguished. On the primary market, a public (through an IPO) or a closed placement of securities is carried out. But the main volume of trades falls on the secondary market, where transactions with previously placed securities take place.
