Basics of the Stock Market
Within this guide we will discuss the key characteristics of the stock exchange. Stocks are traded on an exchange (a physical place) or over the counter (OTC) between brokers via computers. Shares of smaller businesses, many bonds, and mutual funds are usually traded OTC. The greatest and most well known stock market is that the New York Stock Exchange (www.nyse.com). It is located at 11 Wall Street in the financial district of lower downtown Manhattan of New York City. Many nations throughout the world possess their own stock trades.
Stocks and bonds are bought and sold through agents who get a commission on each securities transaction. The stock and bond markets are heavily controlled. In the U.S. the main securities regulator is your U.S. Securities & Exchange Commission (www.sec.gov).
Another important topic to get an comprehension of the stock market is understanding about the Dow. The "marketplace" in this context is usually in reference to this Dow Jones Industrial Average and is well known only as "The "Dow. So what's the Dow? It's an index (set of stocks) reflecting the value of the 30 biggest public companies in the U.S., including IBM, Exxon Mobil, etc.. The Dow was formed by Charles Dow and Edward Jones many ages ago. It behaves like a barometer of the condition of the economy. The Dow (along with also the value of all stocks) are affected by investors' psychological variables (such as investor confidence), economic and political events, wars, and disasters.
There are other indexes other than the Dow. Are there so many? The indexes are groups of shares that behave as performance benchmarks for money managers, such as individuals who manage mutual funds. Mutual funds can have portfolios of big company stocks, small company stocks or a mix. If a mutual fund's investment objective is to invest in smaller sized businesses, the fund manager would not utilize the Dow as a benchmark but another indicator, because the Dow is an indicator of large company stocks.
Stocks and bonds are bought and sold through agents who get a commission on each securities transaction. The stock and bond markets are heavily controlled. In the U.S. the main securities regulator is your U.S. Securities & Exchange Commission (www.sec.gov).
Another important topic to get an comprehension of the stock market is understanding about the Dow. The "marketplace" in this context is usually in reference to this Dow Jones Industrial Average and is well known only as "The "Dow. So what's the Dow? It's an index (set of stocks) reflecting the value of the 30 biggest public companies in the U.S., including IBM, Exxon Mobil, etc.. The Dow was formed by Charles Dow and Edward Jones many ages ago. It behaves like a barometer of the condition of the economy. The Dow (along with also the value of all stocks) are affected by investors' psychological variables (such as investor confidence), economic and political events, wars, and disasters.
There are other indexes other than the Dow. Are there so many? The indexes are groups of shares that behave as performance benchmarks for money managers, such as individuals who manage mutual funds. Mutual funds can have portfolios of big company stocks, small company stocks or a mix. If a mutual fund's investment objective is to invest in smaller sized businesses, the fund manager would not utilize the Dow as a benchmark but another indicator, because the Dow is an indicator of large company stocks.
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