5 things you should know about how stock markets work
Stock markets are followed by millions of people on daily basis and are used as an investment option. Thus everyone should know the following 5 essential things about how stock markets work.
- A company offers its stocks to the public through the stock market and raises funds for its future projects. On the other hand, by buying stocks of this company through IPO process or from secondary market, you have partially ownership of this company and get some rights such as taking dividends from earnings or having voting rights about the company’s policies and selection of management.
- Investing in stocks through stock markets is one of the favorite ways to save and make money for wealth and retirement.
- Stock price of the company fluctuates in the stock market depending on the developments about the global and national economy, industry in which company operates, company’s financial performance, company’s investment projects, etc. Therefore, all fluctuations of all stocks in a stock markets determines the way of stock market as up or down. Demand and supply of stocks in a stock market based on the developments, determine the stock’s daily performance.
- In order to invest in stocks, you should open a brokerage account. You can trade online or take support from a financial advisor, but don’t forget to examine and compare the fees among the firms that offer brokerage services.
- A stock ticker is the symbol of the company in a stock market and it differentiates the company from others. In a stock market report, you can see the data of the companies (prices, trading volume, performance, etc.) by looking their tickers.