First ewill explain what is Stock? Also known as shares or - TopicsExpress



          

First ewill explain what is Stock? Also known as shares or equity. A holder of stock (a shareholder) has a claim to a part of the corporations assets and earnings. In other words, a shareholder is an owner of a company. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. For example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that person would own and have claim to 10% of the companys assets. Stocks are the foundation of nearly every portfolio. Historically, they have outperformed most other investments over the long run. EXPLAINS STOCK MARKET The stock market lets investors participate in the financial achievements of the companies whose shares they hold. When companies are profitable, stock market investors make money through the dividends the companies pay out and by selling appreciated stocks at a profit called a capital gain. The downside is that investors can lose money if the companies whose stocks they hold lose money, the stocks prices goes down and the investor sells the stocks at a loss. The stock market can be split into two main sections: the primary market and the secondary market. The primary market is where new issues are first sold through initial public offerings. Institutional investors typically purchase most of these shares from investment banks. All subsequent trading goes on in the secondary market where participants include both institutional and individual investors. Stocks are traded through exchanges. The two biggest stock exchanges in the United States are the New York Stock Exchange, founded in 1792, and the Nasdaq, founded in 1971. Today, most stock market trades are executed electronically, and even the stocks themselves are almost always held in electronic form, not as physical certificates.
Posted on: Sat, 13 Sep 2014 16:16:52 +0000

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