The stock market is a venue where buyers and sellers meet to exchange equity shares of public corporations. It is a component of a free-market economy and ensures price transparency, liquidity, price discovery, and fair dealing in trading activities.
They may buy and hold stocks for the long term or enter and exit a position within seconds.
The stock market is a free-market economy
Stocks represent ownership stakes in private companies, which sell these shares to investors to raise money. They also give shareholders a voice in how their company is run.
The stock market is a free-market economy, in which individual citizens and businesses can freely trade stocks without government interference or regulation. This allows companies to raise money, make profits through capital gains and earn income through dividends (think of it as an extra bonus if the company does well).
A free-market economy tends to be based on a supply and demand model. This means that when companies are expected to do well and have high earnings, their stock prices will rise.
In contrast, when the economy is struggling, or experts think that a company will do badly, their stock prices will fall. This is because investors are generally looking ahead, thinking about what the future holds and whether the company will have good or bad earnings.
It is a secondary market
A secondary market is a marketplace where investors buy and sell previously issued securities without the original issuing company involved. The process works like buying items in the classifieds, or buying a used car from a dealer.
A secondary stock market operates continuously to facilitate trading of securities between investors. The major players in the secondary market are broker-dealers who facilitate trading, corporations and private individuals.
The market also includes financial intermediaries such as banks, nonbank financial institutions and insurance companies along with advisory service providers like commission stockbrokers.
There are two types of secondary markets – stock exchanges and over-the-counter (OTC) markets. The former are centralised platforms where securities trading takes place, avoiding direct contact between buyers and sellers. Examples of these include the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
It is a regulated market
These regulations monitor large market participants like banks, investment funds, and everyday investors to ensure honesty and maintain fair and efficient markets.
The Wall Street Journal was founded in 1889 by three men – Charles Dow, Edward Jones, and Charles Bergstresser – who saw a gap in the reporting of financial news. They opened the first edition of the WSJ in July of that year, and it has since grown to become one of the world’s most read newspapers.
The newspaper is published six days a week and has several media platforms. It has a Monday through Friday circulation of 2.2 million, and it also offers an online version as well as tablet and smartphone app editions.