on May 13th, 2009Stock
Stock
Stock or Stock market has been one of the most phenomenal inventions of modern day commerce. Stock markets came into existence because of the need for more capital of ever expanding companies. When the companies consumed all of their savings but still needed more capital for expansion, they had no option but to turn to banks for loans or to private parties for loan in return of a share of profits and ownership of the company. While taking loan from a bank was costly in terms of the interest that had to be paid, it also meant constant monitoring of banks on the business. The private parties or individuals can be a threat by seeking every opportunity to overtake the company by increasing their stake beyond 51%. Thus, there was to be another solution which would provide the company with sufficient capital and also keep the threat of being overtaken at bay. If you buy a few shares of any company through the stock market or through the initial offering, you become a part owner of the company. Also, you can buy just about as many shares as you want to depending upon your budget and pocket. Stock markets that are leading the race right now are Dow Jones, NASDAQ, which are the most popular in US, FTSE in UK, CAC in Germany, Bombay Stock Exchange and National Stock Exchange, India. Stock markets are generally assumed to be an indicator of an economy’s health. A booming stock exchange means that the industry is doing absolutely fine and that people have faith in the country’s economy and industry. Also a booming stock market means more wealth for people. And what better example but Warren Buffet, who has made a fortune out of virtually nothing from the stock market. Stock market can be quite a rude shock for people who don’t invest wisely. You must be well informed in order to make any money from the stock market because it does not take much time to lose all your hard earned money in the stock market. You must invest in the companies that are fundamentally strong because their growth year on year is almost guaranteed and more often than not they also pay huge dividends. For all those of you who don’t have enough time on hand for researching on the stock market or the companies, you have mutual funds to invest into. It’s like giving your money to a company which will invest your money smartly and make some money out of it. It’ll pay a part of the profits to you and keep the rest with itself as it’s fee.
