Stock market.....
Investing should be more like watching paint dry or watching grass grow.... If you want excitement take $800 and go to Las Vegas........ - Paul Samulson
In the 1600 dutch east indian company employed hundreds of ships of the gold , silver , spices and silk..... Around the world but running this message operation being cheat in order to fun their expensive voyages , the company turn to private citizens - individuals who could invest money to support the trip in exchange for a share of ships profits. This practice allowed Company to afford even grander voyages. Increasing profits for both themselves and their savvy investors. Selling this shares in coffee houses and shipping ports across the continent. The Dutch East India company unknowingly invented the world's first stock market. Since then , companies have been collecting funds from willing investors to support all kinds of businesses. And today the stock markets has schools , careers and even whole television channels Dedicated to understanding it. But the modern stock market is significantly more complicated then it's original incarnation. So how do companies and investors use the market today ?
Let's imagine a new coffee company that decides to launch on the market. First , the company will advertise itself to big investors . If they think the company is a good idea , they get the first crack at investing , companies initial public offering , or IPO. This launches the company on to the official public market , where any company or individual who believes the business could be profitable might buy a stock . Buying stocks makes those investors partial owners in the business . There investment helps the company to grow , and as it becomes more successful buyers may see potential and start buying stocks . As Demand for those stocks increases , so does their price increasing the cost for prospective buyers , and raising the value of the companies stock people already own . For the company , this increased interest helps fund new initiatives , and also boosts it's over all market value by showing how many people are willing to invest in their idea . However , if for some reason a company starts to seem less profitable the reverse can also happen . If investors think their stock value is going to decline , they'll sell their stocks with the hopes of making a profit before the company losses more value. As stocks are sold and demand for the stock goes down , the stock price falls , and with it the companies market value. This can leave investors with big losses , unless the company starts to look profitable again . This sea-saw of supply and demand is influenced by many factors . Companies are under the unavoidable influence of market forces , such as the fluctuating price of materials , changes in production technology , and the shifting costs of labour. Investors may be worried about changes in leadership , bad publicity or larger factors like new laws and trade policies. And Of course , plenty of investors are simply ready to sell valuable stocks and pursue personal interests . All these variables cause day to day noise in the market , which can make companies appear more or less successful . And in the stock market, appearing to lose value of leads to losing investors , and in turn , losing actual value .
Human confidence in the market has the power to trigger everything from economic bones to financial crisis. And this difficult to track variable is why most professionals promote reliable long term investing over trying to make quick cash. However, experts are constantly building tools in efforts to increase their chances of success in this highly unpredictable system. But the stock market is not just for the rich and powerful. With the dawn of the internet , everyday investors can buy stocks in many of the exact same ways a large investor would. And as more people educate themselves about this complex system they to can take stocks , support the businesses they believe in, and pursue they are financial goals. The first step is getting invested.
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