14.03.2024
Евгений Лебедев
354
4.5
The stock market is a word that conjures up both exciting opportunities and daunting complexities. For many, it represents a distant world of technical terms and unpredictable fluctuations. But what is the stock market? How does it work and, most importantly, how can a beginner take the first confident steps?
Why is it important to understand the stock market
Because it plays a crucial role in the global economy and can be a powerful tool for personal growth and achieving your financial goals. Understanding the stock market means opening up a world of opportunities, learning how to navigate the world of investing, and growing your wealth.
The origins of the stock market
The stock market was born out of the need of companies to finance their projects. There are two main ways to attract financing: borrowing from banks or raising funds from investors. The second option is to issue shares that give investors ownership of the company and, in some cases, rights such as voting rights at general meetings and a share in profits in the form of dividends.
Initial public offering
When a private company floats on the stock market, it becomes a public company by offering its shares to investors on the public stock market for the first time.
An IPO (Initial Public Offering) marks the opening of trading in the company's stock. After the IPO, investors can trade the company's shares by buying and selling them on the stock market.
Trading in the stock market
Today, stock market trading is completely dematerialized and takes place on digital platforms known as online brokers. These online trading platforms allow investors to buy and sell stocks in just a few clicks. Later on this page, we'll introduce you to some of our favorite brokers. Later on this page, we'll introduce you to some of our favorite brokers.
Like any other market, the stock market is where buyers and sellers meet face to face. Buy and sell orders are sent through a broker, and negotiations are finalized when a buyer finds a seller at the offered price, or when a seller finds a buyer at the requested price.
Stock prices fluctuate every day, every hour, and every second depending on international news (macroeconomic context) and company performance (microeconomic context). When demand for a stock exceeds supply, its price rises, and when supply exceeds demand, the price falls.
What are the major stock markets and indices
The world of the stock market is vast and diverse, with each country having its own stock markets. Understanding the characteristics of these markets is crucial to understanding the stock market. Be careful not to confuse a stock market with an index: a stock market is a market where investors meet to buy and sell their securities. An index is a group of assets used to measure the value of a particular sector. Examples include the NASDAQ, DAX, CAC 40 and FTSE 100.
French and US stock markets
The Paris Stock Exchange, now part of Euronext, is the main stock market in France. It is characterized by a strong presence of industrial and service companies. Its benchmark index is the CAC 40, made up of the 40 largest companies listed in France. It is a key indicator of the health of the French economy.
In the US, the main stock markets are the New York Stock Exchange (NYSE) and Nasdaq. The latter is known for its high concentration of technology companies. There are other markets that focus on different types of assets. For example, the Chicago Mercantile Exchange (CME) specializes in derivatives and commodity contracts.
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