While thinking of stock markets, you will imagine prices going up and down every second. Stock markets are, in some ways, perceived as a money-making place like Casino, and many people also prefer punting in stock markets.
But stock markets are also filled with intellectual investors seeking to build wealth. Word of mouth can be a source of positive or negative news. People especially small investors or short-term investors, looking to invest might have got scared by losses exhibited by sensible investors. Even the most successful investor can indeed incur losses.
There have been many successful investors who have navigated market cycles, economic cycles, booms and burst in markets. One thing that remains consistent is the discipline such investor possesses.
Stock markets or equity markets are a part of a broader capital markets system. Stocks means shares, so only shares are traded in stock markets. A stock market is a crucial element of a country’s financial ecosystem.
In order to grow and expand, businesses require capital. One way of raising this capital requirement is through getting the shares traded on one or various stock markets and allowing the general public to invest. Stock Market is a medium which connects investors and capital seekers/companies, who are willing to sell a part of their ownership for a sum of money, which is the stock price.
What is a share/stock?
Also known as equity, it represents the ownership of an entity along with its profits, voting power, losses, and assets. Equity is a long-term source of financing the business and is non-redeemable by nature.
Voting rights are available to equity investors, giving them the authority to control the business and management. It enables the equity investors to choose the people who will run the business, and power to decide on the transactions to carried out by the firm that could impact shareholders, like a stock-merger.
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