by securities, I mean stocks, futures, etc.
2007-07-01 01:44:49 · 5 answers · asked by Anonymous in Business & Finance ➔ Investing
The stock market is an everyday term used to describe a place where stock in companies is bought and sold. Companies issues stock to finance new equipment, buy other companies, expand their business, introduce new products and services, etc. The investors who buy this stock now own a share of the company. If the company does well the price of their stock increases. If the company does not do well the stock price decreases. If the price that you sell your stock for is more than you paid for it, you have made money.
When you buy stock in a company you share in the profits and losses of the company until you sell your stock or the company goes out of business. Studies have shown that long term stock ownership has been one of the best investment strategies for most people.
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2007-07-04 06:23:52 · answer #1 · answered by SWH 6 · 2⤊ 0⤋
Perhaps the best way is by looking at countries where market are o devloped. i.e. some middle eastern countries.
There a few individuals are very welathy, but the masses cannot get in on a piece of the wealth, hense strife.
By creating capital markets, it provids a mechanism for everyone to get in on the distribution fo wealth (at least to some extent).
2007-07-01 03:51:09 · answer #2 · answered by Peaches 4 · 0⤊ 0⤋
Because factories cost billions of dollars and nobody is going to take that risk by himself.
There are less than 1000 people in the World with a billion.
It's a lot easier to gather 10 people and each one invests $100,000,000 and the get 10% of the factory.
There are 10000 people in the World with $100,000,000.00
If you reduce the amount even more to $10,000,000.00 then it gets easier to find the money you need to build the factory. All you have to do is sell more shares to millions of people.
2007-07-01 05:06:03 · answer #3 · answered by Anonymous · 0⤊ 1⤋
So the flow of buying and selling "ownership" in public companies can be handled in a fair and orderly process.
2007-07-01 02:56:25 · answer #4 · answered by Common Sense 7 · 0⤊ 0⤋
1. to provide capital for economic activities.
2. to hedge risk.
3. to establish and further good trade practices
4. to make markets more open and dynamic
5. to enrich investors
2007-07-01 03:36:33 · answer #5 · answered by curio 3 · 0⤊ 0⤋