Stock Market
Overview »
The
term 'the stock
market' is a concept
for the mechanism that enables the trading of company stocks
(collective
shares), other securities, and derivatives. Bonds are still
traditionally
traded in an informal, over-the-counter market known as the bond
market.
Commodities are traded in commodities markets, and derivatives are
traded in a
variety of markets (but, like bonds, mostly 'over-the-counter').
The
size of the worldwide 'bond market' is estimated at $45 trillion. The
size of
the 'stock market' is estimated at about $51 trillion. The world
derivatives
market has been estimated at about $300 trillion. The major U.S. Banks
alone
are said to account for about $100 trillion. It must be noted though
that the
derivatives market, because it is stated in terms of notional
outstanding
amounts, cannot be directly compared to a stock or fixed income market,
which
refers to actual value.
The
stocks are listed and traded on stock exchanges which are entities (a
corporation or mutual organization) specialized in the business of
bringing
buyers and sellers of stocks and securities together. The stock market
in the United States
includes the trading of all securities listed on the NYSE, the NASDAQ,
the
Amex, as well as on the many regional exchanges, the OTCBB, and Pink
Sheets.
European examples of stock exchanges include the Paris Bourse (now part
of Euronext), the London Stock
Exchange, and
the Deutsche Börse.
Investment - why? »
The
stock
market is one of the most important sources for companies to raise
money.
This allows businesses to go public, or raise additional capital for
expansion.
The liquidity that an exchange provides affords investors the ability
to
quickly and easily sell securities.
History
has shown that the price of shares and other assets is an important
part of the
dynamics of economic activity, and can influence or be an indicator of
social
mood. Rising share prices, for instance, tend to be associated with
increased
business investment and vice versa. Share prices also affect the wealth
of
households and their consumption. Therefore, central banks tend to keep
an eye
on the control and behavior of the stock market and, in general, on the
smooth
operation of financial system functions.
The
smooth functioning of all these activities facilitates economic growth
in that
lower costs and enterprise risks promote the production of goods and
services
as well as employment. In this way the financial system contributes to
increased prosperity.
Investment - how? »
One
of
the many things people always want to know about the stock market is,
"How
do I make money investing?" There are many different approaches; two
basic
methods are classified as either fundamental analysis or technical
analysis.
Fundamental analysis refers to analyzing companies by their financial
statements found in SEC Filings, business trends, general economic
conditions,
etc. Technical analysis studies price actions in markets through the
use of
charts and quantitative techniques to attempt to forecast price trends
regardless of the company's financial prospects.
Additionally,
many choose to invest via the index method. In this method, one holds a
weighted or unweighted portfolio consisting of the entire stock market
or some
segment of the stock market (such as the S&P 500 or Wilshire
5000). The
principal aim of this strategy is to maximize diversification, minimize
taxes
from too frequent trading, and ride the general trend of the stock
market.
You
can invest in GMI with minimum initial investment of €
2000.
The
minimum
interest of your investment is 10% monthly.