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Thursday, January 16, 2020

How to stock market work

How to stock market work

Nada Qanbar: In the sixteenth century the Dutch East India Company hired hundreds of ships to trade gold,ceramics, spices and silk worldwide. But these large-scale operations were not cheap. To finance its costly voyages, the company  citizens - individuals who could invest money to support the voyage in exchange for a portion of the ship's profits. This behavior allowed the company to finance huge tours and increase profits for itself and its smart investors. By selling those shares in coffee shops and shipping ports across the continent, the Dutch East India Company created the first stock exchange in the world. Since then, companies have raised funds from investors seeking to support all types of investments. Today, the stock market has a school, a job and even full-fledged TV channels dedicated to understanding that market. But the modern stock exchange is more complex than its original incarnation. So how do companies and investors use the market today? Imagine a new coffee production company that decided to go on the market. First, the company will advertise to large investors.

 I they believe the company is a good idea, they will first invest in it, and then sponsor the company's initial public offer or so-called underwriting. It launches the company into the formal public market, where any company or individual who considers the investment profitable can buy the stock. Stock purchase makes these investors partially trading partners. Their investment helps the company grow, and the more successful it is, the more buyers can see its success and start buying shares. The higher the demand for those shares, the higher the price and cost for potential buyers, and the value of the company's shares will already be owned by the people. For the company, this increased interest helps fund new business initiatives, and also increases its overall marketing value by reviewing the number of people willing to invest in its idea. However, if the company was found to be less profitable then the opposite would happen. If investors believe that the value of their shares will decrease, they will sell their shares in the hope of making a profit before the company loses more value. While he sells the shares and there is no demand for them, the share price decreases, and with them the marketing value of the company decreases. This can leave investors with huge losses - if the company does not start making profits again. This fluctuation between supply and demand is influenced by many factors. Companies are under the influence of inevitable market forces - such as fluctuations in raw material prices, changes in production technology and changes in labor costs. Management changes can cause concern for investors, as well as new promotions and business policies such as poor publicity or key factors. Of course, many investors are ready to sell valuable shares and pursue their personal interests. All these variables cause daily market disturbances, making companies more or less successful. On the stock exchange, a loss of value is often a loss of investors, and, conversely, a loss of real value. Human confidence in the market has the power to spew everything from economic prosperity to financial disasters. And that the hard-to-track variable is a reliable investment in an effort to earn long-term, quick cash in the most professional market.

 However, experts are constantly building tools to increase the chance of success in this unpredictable system. But the stock market is not limited only to the rich and powerful. With the advent of the Internet, limited investors can buy many stocks that large investors can take. And as more and more people educate themselves with these complex processes, they can also trade stock, support the work they believe in and pursue their financial goals. The first step is to invest.

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