3 Things To Know Before Start Investing: How Market Works

the Dutch east India company unknowingly invented the world first stock market .

how does the market work? if you sell the stock it goes down, if you buy the stock it goes up, and you can control the stock market anytime you want.

moreover, the financial industry and experts always guide you for unnecessary reasons. you also follow their news and signals during trading. but actually, it’s myths, it’s not truth.

if stocks going down most people in the stock market are told something like it’s going down because of prime minister has changed, our country’s currency has increased, some celebrities died, two country prime ministers are having debates, and more and more reasons they have. but actually, this is not the way how market works.

1. How does the market work?

furthermore, in the stock market lot of small and big investors come together to invest. well if most investor put their funds on the selling side then the market goes down, if most of the investors are on the buying side the market goes up. this is how the market works. because Benjamin Graham the father of value investing. he taught his student Warren Buffett that the five decades, the stock market has been a waiting machine.

if you sell it goes down (or) if you buy it goes up. you can able to control the stocks anytime you want, then suddenly you feel like, oh this is how the market works? yes of course. if you didn’t accept my words then think yourself when you have unnecessary reasons for selling and buying stocks. you can change your trading strategy but you can’t change the stock market this is how the market works.

2. when did the stock market start?

in 1600 the Dutch East India Company employed hundreds of ships to trade gold, porcelain, spices, and silks around the globe, but running this massive operation wasn’t cheap In order to fund expensive voyages the company turned to private citizens, individuals who could invest money to support the trip in exchange for a share of the ship’s profits.

so this practice allowed the company to afford even grander voyages increasing profits for both themselves and their savvy investors. selling these shares in coffee houses and shipping ports across the continent. the Dutch East India Company unknowingly invented the world’s first stock market. since then companies have been collecting funds and willing investors to support all kinds of business.

3. how do business are registered in the stock market?

identically for example if you run a private business but however you think to expand the business as large. so you do not have a big amount of investment to raise your capital, but if you go public then you’ll be able to expect for big investment to expand your business.

first of all any type of company who wants to go public must register in the national stock exchange and submit all the required forms and files. then to bring a lot of investors into their company, they give a large budget of advertisement to attract
more investors.

how did the business deliver shares?

truly here we take the Apple company example to understand how business shares are delivering, for instance, If Apple has 100
dollars in their business bank account, the company wants to deliver 100 shares, then they want to inform and sponsor initial public offering security and exchange commission to release all the shares.

then what would be the value of every share in the stock market? Simply, every share is one dollar. because they have 100 $ in their bank account and they deliver 100 shares as stock in a stock exchange. but instead of releasing the 100 shares if they release the 200 shares what happens every share value is 50 cents .this how the shares are calculated in the stock market.

in addition you want to know more about how the market works and how to start investing, here I recommend my 5 favorite books that can help you bring you more knowledge.

1. How the Stock Market Works