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| Understanding the Stock Market |
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| Written by Michael Swanson |
| Wednesday, 21 April 2010 07:41 |
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The term stock market is self explanatory. It is a marketplace, either physical or virtual, for the buying and selling of shares of stocks or stock derivatives (i.e. Options). Owning a stock tip means having an equity stake in a particular company, the shares of which are publicly traded at a stock exchange or stock market, for example the New York Stock Exchange (NYSE). The first stock market can be tracked to ancient Rome. The Roman government offered up for bid contracts for projects. Those assuming the contracts were the "publicani." These were groups that made available to investors shares in their organizations. In 1606, the Dutch East India Company was the first organization to issue stock after the Middle Ages. Many consider it to be the first multinational corporation. Today, there is no other stock exchange larger than the New York Stock Exchange. If you were to add up the total stock value of all its listed stock, you would come up with a market capitalization in excess of 25 trillion dollars. The NYSE has grown tremendously since its origins on Wall Street in New York City in 1792. In fact, the volume of shares traded daily can exceed 2 billion, the value of which can exceed $41 billion. Huge sums of money can be either made or lost in the stock market. People owning stock in the midst of a bull market can see a sizable increase in their worth. However, they can lose an appreciable amount if their holdings are faced with a bear market. October 24th, 1929 has been recorded in the history books as Black Thursday. It was then that the NYSE saw the start of a precipitous fall in the value of stocks. Panic selling kicked in five days later on Black Tuesday. On that day the value of shares dropped in excess of $14 billion. Some mark this financial catastrophe as the advent of the Great Depression. Investors have long spent time trying to determine the next bull or bear market. What is new is that the Internet has had a profound impact on trading stock. Nowadays, investors can make a beeline straight to the exchange floor and buy or sell stocks at the touch of a few keys. About the Author: For more on the stock market subscribe to our Mike Swanson WallStreetWindow stock market for beginners weekly newsletter. Kindly provided by MoneyHunter.org You are welcome to use this article on your own website, if you include the link just before this text. |
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