The Importance Of The Stock Market

Although finance is a world within its own it is still very important to know the most basic way to manage your money or even knowing how invest your money.

According to Alfaro, Chanda, Kalemli-Ozcan, & Sayek (2004) stock markets play a vital role as they allow investors to buy and sell shares in publicly traded companies. They are one of the most vital areas of a market economy as they provide companies with access to capital and investors with a slice of ownership in the company and the potential of gains based on the company 's future performance.

There are a lot of paths a person can take when it comes to investing. The stock market offers thousands of opportunities with more than 7,000 stocks to invest in. While there are perks to short-term investments, long-term ones typically offer a set of advantages that a day-trade can't provide. The Motley Fool cites nine unique beneficial factors long-term investments have to offer.

Personal finance is overall a very important topic that many people don’t know enough about. Investing is something that I do not know enough about and I know it is a very important. My parents have always told me that you need to do something with the money you don’t currently need because you could be making a profit off of it and you won’t by just putting it in the bank. When I was younger I used to get bonds from family as presents, one of those bonds that you can buy for about $5 and in 10 years it would be worth $20. As I got older my dad helped me put some of my money into a fixed term bank account where I had to keep the money for year long periods and I received higher interest. Eventually I decided I wanted to invest money into the stock market, but I did this by giving my dad the money and telling him he had four years to make me a profit so I had the money by the time I graduated college. But by doing it this way I know nothing about where the money is or how to manage it myself. I am interested in learning more about investing, focusing on the stock market but there are many different types of investments. There are bonds, mutual funds, stocks, and then there are other types such as real estate (“Investing 101: Types of Investments”.)

Investing allows an individual to continue earning money 24 hours a day, seven days a week and 365 days a year. It does not matter whether they are working at their day job, mowing their lawn or simply doing nothing. In other words, investing maximizes an individual 's earning potential.

Investing plays a huge role in any country, business or individual’s life. Investing is the action or process of purchasing an asset in hope that it will generate income and ultimately appreciate within the future. They can be goods that are not used right away, but held onto and used in the future in order to create wealth, or a monetary asset that will provide income in the future and will be sold at a higher price for a profit.

It is easy to understand why many people lose a lot of money when they invest in stock market, because the process of choosing the stock and investing is confusing. Fortunately, the market itself is not as complicated or confusing as people think. To completely understand the stock market and how it operates, will potentially help an investor to make good investment decision. The basic definition of the stock market is the place where anyone can sell and buy shares of the company. The trading begins when the company decides to make shares available for public and what you get when you purchase a stock is a percentage

MISS A LITTLE, MAYBE MISS A LOT - Over the 5 years of trading through 6/30/17 (i.e., 7/01/12 through 6/30/17), the S&P 500 was up +14.6% per year on a total return basis, i.e., counting the

Many millionaires have been created due to the creation of the stock markets. Heather Long (2015) reported that less than half, or 48 percent, of American adults have money in stock markets. That is approximately 153 million adults in America investing in stocks and the number grows daily. The market is growing like never before because of the NASDAQ Composite. What is a stock? It is a good or merchandise kept in stock available for sale or distribution by a business or warehouse. A stock allows one to be part owner in a company with a claim (“Stocks: investing in stocks”, 2015) on the stock market. You can also chose what kind of stock to invest into whether it is individual stock, mutual funds, or index funds. The first stock exchange

Buying shares means buying a slice of a company with the hopes you may one day be able to sell it for more than it is worth right now. Ideally, you are going to come up with your own investing strategy and/or process rather than just throwing your disposable/saved money into shares without any structure.

Corporate profits move pro-cyclically and what investors need to ideally focus on the effective rate that companies pay. During recessions, the effective tax rate will often exceed the statutory rate due to the decline in profits. Although the statutory rate has been relatively unchanged over the past thirty years, corporations’ effective tax rate since 2002 has been generally lower due to various tax provisions offering relief passed by the Bush and Obama Administrations. According to data embedded within the National Income & Product Accounts (NIPA), the decline in the effective tax rate and since 2002 has been associated been associated with lower GDP growth rates compared to the 1980s and 1900s. Thus, there seems little evidence of lower corporate rates, statutory or effective, being associated with faster economic growth.

The stock market is essential to the financial industry, as stocks are a source of funding for public corporations. In order to increase equity efficiently and cheaply, corporations issue stocks to the public who supply the funds. In return, the suppliers receive dividend payments and partial ownership in the company which classifies them as shareholders (Saunders & Cornett, 2015). Since, shareholders play an important role in the corporations funding, it is necessary for organizational leadership to be mindful of corporate policy changes, as certain changes may drastically impact the existing shareholder base. Moreover, corporate policy changes alter the appeal of a company’s stock, giving the public more or less incentive to purchase stocks. As a result, the implications of an organization issuing additional shares of common stock, announcing a new share repurchase program and increasing quarterly dividends per share, can all impact an existing shareholders view of the company and the market. Therefore, discretionary policy changes are fundamental, due to the signals certain announcements can indicate within the financial industry.

2017 was another year full of surprises – equity markets globally are much stronger than most expected

All financial markets can be erratic. It has experienced significant fluctuations in business cycles, inflation, and interest rates, along with economical recessions throughout the past century. The 1990s experienced a surge of growth due to the bull market pushing the Dow Jones industrial average (DIJA) up 300 percent. This economic growth was accompanied by low interest rates and

Why Invest? Investors make investments to have them appreciate in market value, earn income from interest and dividends, or to have influence or control of another company.