Stock simply refer to supply. When you purchase a company stocks, it basically mean you supply money to the company and hoping that the company will make the money grow. A stock market or equity market is a public entity for the trading of company stock (shares) and derivatives at an agreed price.
So, what is stock market or equity markets? The term “stock market” refers to the business of buying and selling stock. The stock market is not a specific place, though some people use the term “Wall Street” or “Shanghai Index” to refer to general stock markets in general of a country. When a company want to grow they business, they would need capital to expand, they can borrow money from financial institution but that would make them in debt or owning money which incurred interest. By issuing stock, they can raise they fund from other’s people money.
Why people buying stock by giving money to a company? Owning stocks in a company mean you own part of the company. You are actually investing capital to the company and when the company making profit from your capital investment, your money grow by either receiving dividend or you sell off your shares by having a return rate of the capital investment that you made which are also known as stock market trading.
Over time, people usually earn more from owning stock than from leaving their money in the bank, buying bonds, or making other investments such as mutual fund. By fair, the risk will also increase comparing the others. A careful study and analysis of the company that you are going to invest decide if you are to succeed. otherwise, you are just gambling your way out, most of the time gamble do lost money.
What is stock market-Bears and Bull
You will often heard of bear market when people losing money or bull market when people making a lot of money. What is stock market going to do with this term? Bull is a bold animal that will charge ahead while bear is more to cautious and do not move fast. “Bull market” usually define the stock market is going up, company making money, investor making money. Likewise, the term “bear market” describes a time when stock prices have been falling on the whole.
Bull or bear market can also relate of what type of investor you are. A bearish investor will invest cautiously by researching and study a lot of the company of his or her selection while a bullish investor are just basically believe the market will go up and thus put his money into the market. Dependant on what type of investor you are, i hope you are the intelligent investor that will generate growth on your stock analysis.