The stock market is the capital market on which securities are traded. Its most important component are the exchanges on which trading takes place. The current share prices are calculated there.
Share prices make a statement about how individual shares and the entire stock market will develop. The stock market is also comprehensively analyzed and monitored. One of the most important characteristics of the market is the transparency required by the USA Stock Corporation Act.
Difference between the stock market and the stock exchange
The terms stock market and stock exchange are usually used synonymously. The stock market clearly describes the entire market, while the stock exchange is simply the place where business is done. Incidentally, most of this happens digitally today, so that buyers or sellers no longer really have to go to the stock exchange to purchase shares, but can do so via the display on the PC or smartphone. Your advantage: You can view the current prices around the clock and buy shares at the right time.
Actors in the stock market
In addition to analysts, brokers are primarily represented on the stock market. These serve as middlemen between buyers and sellers and handle the stock transactions.
The brokers must be sworn in to offer their service and must always be contacted when stocks are bought or sold. If they do not own them, they buy the shares on the stock market and pay a commission for it, which the buyer then has to pay in addition to the price of the share.
Tip: Comparing the individual offers on the stock exchanges is good for your finances. Because the prices are calculated individually on each exchange. So if you compare, you can save a few Dollars.
What is affecting the stock markets?
The stock market develops depending on how the prices develop. How good the stock prices are depends on supply and demand. Economic developments naturally play a major role here. For example, if there is a supply bottleneck in an industry, that industry is not doing very well, which affects the stock market.
However, that doesn’t have to mean that the entire market is doing badly. Events in politics that can drastically change the situation on the stock markets are more serious. Economic crises have a very strong impact on the market. Wars, bankruptcies, differences and trade embargoes are also causing changes. In addition, the rates are subject to constant fluctuations due to the currency and the exchange rate. For the DAX, this is the EUR / USD rate.
Getting involved in the stock market: what to keep in mind
Many investors fear investing in the market. There are numerous opportunities for high dividends on the stock markets. You can make a profit from the first Dollar. If you want to get into the stocks business but have no experience with stocks, then you should see a financial advisor at one of the many banks and talk to them about your plans and Get All Major information about the stock market. Basically, however, you should consider the following tips:
Once you’ve found a company that you want to invest in, the first thing to do is look at the company and look at the numbers over the past few years to see how it has performed. Also see if you can identify with the company. If this is not the case, you should rather refrain. Another recommended activity before buying stocks is reading plenty of articles on the stock market available on the Internet, to be better informed of the process.
A broad portfolio
Build a broad portfolio with your financial advisor and invest in various industries. In this way you are securely positioned when a crisis occurs in an industry.
Invest in companies that make long-term profits and pay dividends to your shareholders. You can find out what these are from your adviser.