What is Stock market

Stock Market

I hope all have about this market at-lest once in your lifetime. This market is a product of Capitalism. The first stock markets popped up in Europe to finance the voyages to India for trading. Dutch East Indian company is one of the first company in the world to issue stocks to common public. Once the voyage is successful and made profit the company will distribute a portion of the profits to the people who partnered with the company to rise company; in modern times we say dividends which is a portion of the profit earned by the company.

So the stock market is just like rice market or wheat market ,the only difference is that here people exchange a piece of ownership of a company for a particular amount of capital. Stock market is the backbone of capitalism which promote private property owning and it gives every individual whether you are black or white African or European to grow along with the company you are owning a privilege you cant get in any other economic state.

    In modern times this crude idea is refined, organized and made under regulation to form one of the largest stock exchanges in the world like NYSE, Kochin stock exchange, London stock exchange etc. In olden days the investors didn't had any protection from the governments but in this era investors are given maximum protection government can give so that the people will invest and the nation can grow rapidly. So I hope you got what is stock exchange or stock market.

  Knowing big big formulas or having PhDs is not necessary to become a successful investor but having a good degree in finance or accounting can help you great in this field. Any kind of studies are good but when you use your logic without any feelings you can win stock market and become one of the best investors. Its not about  only making  money; Its a way to build wealth and freedom, I know i am becoming little bit philosophical. But that's the reality. Many people will say that stock market is a way to make quick money but that time use your rational thinking and make decisions. Even Sir Isaac newton have failed in investing in south sea company. So its not about having great knowledge or IQ but suppressing your human feeling. Now you will be thinking what this guy is always saying about human feelings? The two main kind of emotions which we have to suppress in-order to become a great investor is Greed and Fear. Both can make you broke. But without both of these traits humankind will never progress. So what's the solution. Control it through gaining knowledge. Once you know the dangers; you will at-lest control yourself not to step into it.

       The invisible hand as Adam smit say which control stock market is demand and supply. So from an investor perspective we should look for companies which are undervalued by MR. Market for  investing. The prices of the stock in the stock market is valued mainly on demand and supply basis but as an investor we are lest concerned about the current traded price, but speculators or traders are mainly concerned about this.