An Overview of the Stock Exchange

An Overview of the Stock Exchange

There are few words in the English language that can inspire more fear than the words, "Wall Street". Viewed as both the ultimate get-rich-quick location and a boulevard of broken dreams, "The Street" is littered with the hopes, dreams, and finances of many an unwise investor. Perhaps this is the reason that so many people are afraid to invest in the stock exchange... they like the thought of being able to invest, but too many horror stories have them falling ill at the mere thought of it.

In truth, however, the stock market is only scary if you let it be. 

Looking at the stock market (aka "Wall Street", "The New York Stock Exchange", etc.) from a logical standpoint helps to take a lot of the fear and loathing out of it. 

• Yes, there are a lot of investors who have literally made millions overnight playing the market. 
• There are also a much greater number of investors who have lost that much or more in the same amount of time. 
• Right in the middle, though, is where most people end up... no great gains, no great losses, just an average portfolio that lets them put aside their invested money for months or years until they need it. 

But let's take the first thing first... what exactly is the stock market? Basically, the stock market is a marketplace like any other, but instead of buying tangible goods such as produce or supplies the investors purchase pieces of publicly-owned companies.

As a quick example, let's look at Wal-Mart. Wal-Mart is a publicly-traded company, public citizens can purchase portions of ownership in the company (also known as "shares"). Most publicly-traded companies have billions of shares or more, so most people can freely invest their money into these companies without worrying about the company running out of shares.

• If the company does well financially, more people will want to buy those shares and the price of the shares will go up. As the price of the shares goes up, the shareholders will make money. 
• Alternately, when the company does poorly or is wracked with scandal, then people don't want to buy it (and want to get rid of what they have) and the price will go down, sometimes drastically (think Enron.) 

Due to this fluctuation in prices depending upon the actions of the company, there is a great potential to both make and lose money without much effort.

The popular saying, "Buy low, sell high," is some of the best advice that anyone can give, if you have an opportunity to follow it.

• When a company has potential or is doing well and is reasonably priced, it can be a good investment to buy as much as you want or can afford and hope that the prices rise. 
• If a company reaches its peak or starts to perform poorly, sell off at least some of what you own for a profit, and then watch to see if prices fall.  
• (There is another option, of course... don't sell the shares and see if the stock recovers at a later date. This can sometimes be your best option if you're investing long-term or as part of a retirement plan, but in some cases the company is unable to recover or goes out of business.)

In addition to "buy low, sell high", another common phrase in dealing with the stock market is "diversify your portfolio." Though diversifying can seem a bit confusing at first, it basically means that instead of buying all of your stocks as a single type, you should buy a variety of different stocks and bonds in a variety of different industries. That way, if one type of stock starts doing poorly (such as telecommunications companies), then you'll be leveled out by another section that's showing an increase in prices (such as biotechnology). 

Of course, there is more on the stock exchange than just publicly-traded companies. In addition to company stocks, you can also buy bonds in futures (bonds that are usually based upon perishable goods and are estimates of how well they will do at some specific future time), government bonds (kind of like savings bonds, but are based in various government programs), and indexes (based upon an average of prices for the indexed product, such as diamonds or precious metals.) Indexes and government bonds are especially useful when diversifying, as they are generally much more stable than other forms of the market.

The most important thing that you need when deciding to invest is a little bit of common sense.

• If something sounds too good to be true, be wary of it; if you're looking to get rich quick, you're looking in the wrong place. 
• Be smart, research stocks and bonds, and keep an eye on your money. 
• Invest with long-term goals in mind, and try not to freak out when one or two of your stocks take a temporary dip. 
• There is money to be made in the stock market, as long as you allow it to happen.

http://www.associatedcontent.com/article/2981/playing_the_stock_market.html?cat=3

Understanding The Stock Market

The stock market is where the shares in companies are bought and sold, providing

• companies options to access capital, and 
• investors opportunities to own a share of the company and enjoy potential gains from the company’s future performance.

The stock market offers people the ability to generate a separate income stream apart from their daily jobs, or income streams which are superior to those from traditional savings deposits. But before you even think about buying and selling shares, you must know the fundamentals of the stock market and of trading.

First time investors can become confused because of the terminology that is used to describe various market functions. These don’t take long to learn. Click here for your basic share trading terms. Incidentally, one common confusion is over the terms ‘ stocks’ and ‘shares’. Actually, they both mean the same thing and can be used interchangeably.

The Role of Bursa Malaysia


You can only invest in stocks through a stock exchange, an organized marketplace where stocks are bought and sold under strict rules, regulations and guidelines. The Malaysian stock exchange is called Bursa Malaysia. Bursa Malaysia has over 1,000 listed companies offering a wide range of investment choices to local and global investors. Companies are either listed on Bursa Malaysia Securities Main Market or ACE Market.


Raising Capital on the Stock Market


The Stock Market was created by companies wishing to raise capital for their business. When someone says they have a listed company they mean listed on Bursa Malaysia. All companies need cash to take advantage of growth opportunities. Many start-up companies however find themselves short of capital to fund expansion. One way to acquire this cash is to publicly float the company. This involves selling part of the company to private individual and institutional investors who are then able to freely exchange these stocks on an open market. Purchasing stocks in a company that is listed on the stock market is done through an Initial Public Offering or IPO.

Once an IPO has been issued, you can contact the company (phone, fax or email) for a copy of the Prospectus and complete the application to apply for an allocation of shares. Or you can wait until the company is floated and buy shares on the open market. Besides Bursa Malaysia, stock brokers will also have information regarding Initial Public Offerings.

Companies that are already listed can also raise additional money on the stock market by offering existing stockholders the opportunity to buy more stocks in the company. For example, a listed company wanting to raise additional capital might issue one new share at 5sen each for every three shares an existing investor owns.

When you buy shares, you are buying a share in that company and so you own a percentage of that company. When the company makes a profit, you share in that profit in the form of a dividend. Typically, the number of shares that have been issued multiplied by the share price gives us how much a company is worth.


http://edividend.bursamalaysia.com/website/bm/bursa_basics/investing_basics/understanding.html

Though risky, one of the advantages of the stock market is that it can be used for various purposes.

Stock Market Strategy

What do you know about the stock market business? Do you find yourself accounted enough with the information related to the stock market to start gambling? In the case, you are, we might only give you our congratulations and wish good luck and nice profit there. However, if you find it would be important for you to account yourself with some interesting facts related the stock market business we might be helpful for you. Any way, we consider it is significant to understand the fact that disproves some unauthentic information.

People all over the world are talking about the great risk that we are under when we involve our assets into the stock market gambling. There were gossips that people all over the world lost huge amounts of money in the stock exchange business. It means that the people who have heard this resist involve money at the stock market. To be honest, the great deal of potential investors keeps their assets in the bank account thinking that it is the most safety place for them. Moreover, we would not dispute as for the fact that the stock market business is the risky one. Nevertheless, you should remember the fact that your bank account would never bring as much money as the stock market might do.

Any way, you should also be well accounted with the information that the lost as well as wins at the stock market gambling depends on the proper organization the speculations. What might you do for it? The only thing that depends on you is to make the proper investment. In the other words, you should observe and discover all possible information that characterizes the stock exchange you are going to deal with.

Whatever, you think it would be of great value for you to account yourself with the portfolio of the definite stock market. The portfolio of the stock exchange, you are going to deal with as the any other portfolio, includes all needed information that might be helpful for you to make the final decision. Nevertheless, there are the plenty of additional particularities of the stock market, which are common for the every single stock exchange. We are talking about the stability, dividends, visibility and the international exposure of the definite stock exchange. However, you might take into consideration the fact that relate the education and experience of brokers that are gambling at the very stock exchange before you would invest your money in it.

Frankly speaking, the brokers are the person directly responsible for the profit and benefit of the stock market. The only broker might deal with the speculations at the stock exchange and make you win or lose additional funds.

One of the advantages of the stock market is that it can be used for various purposes. Even the people who are involved into retirement investing consider the investments into the stock market activity to be a great investment tool.



http://usabestloans.com/finance/stock-market-strategy-11/

People all over the world lost huge amounts of money in the stock exchange business.

Stock Market Strategy
25.02.2010

What do you know about the stock market business? Do you find yourself accounted enough with the information related to the stock market to start gambling? In the case, you are, we might only give you our congratulations and wish good luck and nice profit there. However, if you find it would be important for you to account yourself with some interesting facts related the stock market business we might be helpful for you. Any way, we consider it is significant to understand the fact that disproves some unauthentic information. People all over the world are talking about the great risk that we are under when we involve our assets into the stock market gambling. There were gossips that people all over the world lost huge amounts of money in the stock exchange business. It means that the people who have heard this resist involve money at the stock market. To be honest, the great deal of potential investors keeps their assets in the bank account thinking that it is the most safety place for them. Moreover, we would not dispute as for the fact that the stock market business is the risky one. Nevertheless, you should remember the fact that your bank account would never bring as much money as the stock market might do. Any way, you should also be well accounted with the information that the lost as well as wins at the stock market gambling depends on the proper organization the speculations. What might you do for it? The only thing that depends on you is to make the proper investment. In the other words, you should observe and discover all possible information that characterizes the stock exchange you are going to deal with. Whatever, you think it would be of great value for you to account yourself with the portfolio of the definite stock market. The portfolio of the stock exchange, you are going to deal with as the any other portfolio, includes all needed information that might be helpful for you to make the final decision. Nevertheless, there are the plenty of additional particularities of the stock market, which are common for the every single stock exchange. We are talking about the stability, dividends, visibility and the international exposure of the definite stock exchange. However, you might take into consideration the fact that relate the education and experience of brokers that are gambling at the very stock exchange before you would invest your money in it. Frankly speaking, the brokers are the person directly responsible for the profit and benefit of the stock market. The only broker might deal with the speculations at the stock exchange and make you win or lose additional funds.

The beauty of the stock market is that it can be used for various purposes. Even the people who are involved into retirement investing use the investing into the stock market to be a great investment tool.

So, people who are without any jokes interested in getting income with the stock market – please check out the latest stock market news.

Insight into Stock Market Economy

Stock Market Economy

The Stock Exchange, “share market” or a “bourse” is a mutual organization for traders or “stock brokers” who trade in different company securities and stocks. Companies or businesses have to be “listed” in the bourses in order for any trading or exchange in their “shares” or equities to be carried out. Stock markets are also the place for trading in unit trusts and bonds issued by the government.

Like most other markets, the Stock market economy also depends on a number of factors with investor confidence being one of the keys. The amount of money that an investor will put on a share of a particular company depends on his perception of the company doing well in future or has been doing so for the past period. By putting in his money in the share of a company, the person becomes entitled to a share of the profit or loss the company makes. The initial offering of stocks and bonds is carried on at the primary market whereas trading of securities happens at the secondary market. Exchange of stocks, however, is the most important function of the Stock Market.

In the long run, as the shares are owned by the companies themselves, improved profits of the company are reflected in high stock prices also resulting in high stock indices. But the stock market is known as being one of the most volatile markets with ups and downs much difficult to comprehend than highs and lows in corporate profits. Swings in stock markets are known to be driven more by the speculative psychology of investors than actual economic analysis. Stock markets are sometimes said to be characterized by irrational exuberance rather than corporate performance being the real cause. Some analysts also point out that increased earnings on the part of investors will engage them more in speculative activities in the stock market.

Some of the most important stock indices reflecting the swings in the stock prices are:

Dow Jones Industrial Average
Standard and Poor 500 Index
NASDAQ
NYSE (New York Stock Exchange)

The major Indian Stock indices such as the Sensex and the Nifty have also shown huge increases from the early 1990’s and although Dalal Street experienced huge crashes in-between.

While stock market capitalization in India has increased by four times in the decade of 91’-92’ to 2001-02, capital formation in the country had barely increased over that decade. As a result, investment has also not risen commensurately which again suggests that the financial markets dance to a tune of their own. Upward swings in the stock market in early 90’s were mainly caused by a rise in Foreign Institutional Investment which only led to increase in the country’s foreign exchange reserves.

Although Stocks can mobilize savings into investment and can cause the growth of the company and increase its market share, it is not always a barometer of the economy in its true sense. Redistribution of wealth is not always indicated as fallout of a surge in the Stock indices. However, socio-political stability devoid of any recessionary effects can have a positive influence on the Stock Market Economy.

http://www.economywatch.com/market-economy/stock-market-economy.html

Stock Market Investment

Stock Market Investment

Stock Market Investment refers to the investment in the market; where exchange of company stocks or collective shares of the companies and other kinds of securities and derivatives takes place. Stocks are traded in Stock Market by the help of Stock Exchange.

The Stock Exchange brings the sellers and buyers of stocks and securities under same roof. The available stocks are listed and traded in the Stock Exchange among the buyers and the sellers. Proper investment in Stock Market essentially requires detailed knowledge of Stock Market, its’ participants, knowledge about the functioning, behavior and contribution of the stock market.

Main Participants of the Stock market

The main participants of Stock Market are the individual investors, banks, insurance companies, mutual funds and pension funds. Since, markets of today have turned more “institutionalized”, the largest share of the market participation comes from the large institutions rather than individual rich investors.

Functioning of the Stock Market

The stock market functions through the Stock Exchanges. Stock Exchanges can be a physical entity and sometimes a virtual entity. In physical stock exchanges, transactions are made by auctioning. In this case, a buyer offers a specific price for a stock by verbal bid and the seller asks a specific price for the stock. When the buyer’s bid price and seller’s price match, exchange of stock takes place. In the presence of multiple buyers and sellers market operations are carried on a first come first served basis.

Contribution of Stock Market

Stock Market is the best medium of raising funds. Businesses which need financing for expansion or improvement can easily raise required capital by participating in Stock Market. On the other hand, for the investors; investing in stocks is a better option than investing in property or real estate as the stocks contain more liquidity than any other property. This means, stocks can be sold more easily and quickly than any other property and so, the investors can get their money back by selling the stocks anytime they need.

The prices of stocks or shares in the Stock

Market have strong effects on the economy in various ways. Prices of stock influence business investment, individual household consumption and wealth of individual households. For this deepening effect, Central banks of each country keep a track of the Stock Market activities. A proper functioning of Stock Market in a country can result in low costs, increased production of goods and services and increased level of employment. In this way, an efficient Stock Market can contribute to economic growth of the country.

Behavior of the Stock Market

The behavior of Stock Market and the prices of stocks depend greatly on the speculation of the investors. So, over- reactions and wrong speculation can give rise to irrational behavior of the Stock Market. Excessive optimistic speculation of future prospects can raise the prices of stocks to an extreme high and excessive pessimism on the part of the investors can result in extremely low prices. Stock Market behavior is also affected by the psychology of “Group Thinking”. The thinking of a majority group of people many times influences others to think in the same line and the Stock Market behavior gets naturally affected.

Sometimes the Stock Market behavior is affected by rumors and mass panic. The prices of the stocks fluctuate tremendously by the economic use even if it has nothing to do with values of stocks and securities.

So, it is extremely difficult to make predictions about the Stock Market and the inexperienced investors who are not that much interested in financial analysis of stocks; rarely get the financial assistance from the Stock Market at the time of need.

Source:

http://www.economywatch.com/stock-markets-in-world/stock-market-investment.html