stock market for dummies
stock market for dummies on this day is one of the most effective types of business. The special attractiveness of stock market in the fact that in the current conditions it is investing in securities allows the most competently approach to the distribution of their capital. This is achieved by the fact that securities are the least likely to be influenced by fundamental factors. They are able to protect the capital against inflation, that allows to speak about this kind of investment, as the most effective instrument of investment management.
Investment in shares is attractive also the fact that this type of investment in addition to its effectiveness has a rather high level of profitability. For comparison, you can give an example, when we make a contribution to the Bank in the national currency at a certain percentage. The aim of our contribution, and increase the capital. But there is such a thing as inflation. For quite short period of inflation is capable of not so much increase, rather, to reduce the real value of cash, as with the growth of inflation are often Central banks are undertaken a number of countermeasures for the stabilization of the situation. Such measures could be the reduction of Deposit rates, and refinancing rates.
It is for this reason, the shares on the date the stock market for dummies are the best means to increase the capital. The most effective action is brought in long-term investments.
stock market for dummies everything in order.
So, the stock market (for dummies) is a mechanism where converge the interests of buyers and sellers of a market instrument. The most common types of market mechanism are shares and bonds. It is necessary to distinguish these two concepts, as they are not identical.
In the most General form of the action represents a local paper, the owner of which has the right to receive part of the profit and which is expressed in the form of dividends, the size of which depends on their (shares) number. In other words, the action gives the opportunity to be the owner of the part of property of the company, which sells them stock market for dummies.
In turn, the bond, represents a valuable paper, which gives the right of its holder to receive from the Issuer at a par value of such paper in money terms, or in another equivalent due to such term paper.
But do not think that the stock market for dummies transactions are made only with shares and bonds. In fact, market-based instruments is quite diverse. One of its varieties are options. The option represents the right to purchase or sale of shares through a certain time in the resulting option price.
At the present time, with the rapid development of Internet-technologies, the procedure of settlement of transactions considerably easier. This advantage is that you can participate in auctions from anywhere in the world. But, in addition, there are many exchanges, which have a real geographic location.
The peculiarity of the stock market lies in the fact that to trading on him possibly being a member. That is why the stock market for dummies refers to the number of closed.
Based on the above, all participants of the stock market for dummies can be divided into three categories.
stock market for dummies 1.Профессиональные participants. This is the most numerous group. This includes both physical and legal persons who are engaged in various organizational activities. To such participants can be attributed dealers, brokers, etc.
stock market for dummies 2. The investors. They can be both citizens and legal persons, which carry out operations on the stock market. As a rule, investors carry out operations on the securities market on its own behalf and at its own expense. All this is done for the purpose of generating a profit. But do not forget that we are talking about the stock market, where in addition to the speculative activities of the investors may also be interested in obtaining some of the rights that are guaranteed security.
stock market for dummies 3. The issuers. These are the specially authorized bodies in the face of either physical or legal entities, who are attracted by issuing securities cash flow. Feature of the issuers is the fact that the obligations in the securities they carry out on their behalf.
in the USA the majority of participants of the stock market - the physical person, in Japan - legal. As for the uniform distribution of natural and legal persons, that such a balance is typical for the vast majority of countries.
But the presence of the Internet, required capital and Your wish to trade on the stock exchange may not be enough for the participation in the auction of some States. So, for example, in Canada, are prohibited from taking part in the auction of foreign citizens and legal entities.
Now let's try to understand what is happening in the stock market. To do this, we need a tool that will make you understand what is happening on the securities market. And in this tool are the indices.
Stock indices - it is an essential attribute of any stock market for dummies. To them the attention of a huge number of investors and mass media. Stock index values extensive highlights financial publications, which are closely monitoring their dynamics. Today in the world there is a huge number of indexes, but the most popular and effective are not many. As a rule, for each country participating in the trade turnover on the stock market, is one index. But there are exceptions. For example, the United States, where the generally recognized are just three of the stock index.
Let's try to understand what are the stock indices, and for what they are.
Any investor, who ever invested in securities, certainly, posed the question: «In which securities to invest? What will be the profit when investing money in this or other kind of security? Is there a risk of loss of investment?», etc. And it is in order to get answers to these questions are the stock indices. They are able to give to an investor comprehensive information, which securities for today are the most liquid, popular. In addition, with the help of indexes of the investor can calculate in advance the potential profit from the investment. But, when considering that, or the other index is taken into account, that each of them is intended to reflect the dynamics of one or another sphere of the financial instruments, which are classified according to different principles. For example, the stock RTS index reflects the dynamics of the market instrument depending on the trading floor, the index of MISE - capitalization, etc. In order to understand what drives the stock index, it is necessary to know the principles of their construction.
The Dow (Dow Jones) stock market for dummies
This index can be described as the first modern stock index. Its peculiarity lies in the fact that he can give characteristic as in the whole market, which is its great advantage, so any given area of the economy.
Stock indices S&P 100 and S&P-400 / S&P 500 stock market for dummies
These indices can be calculated as the ratio of the amounts of works price of the stock to their number, of both the present and the base period. The main difference between the S&P from the Dow Jones in the fact that they are used in options and futures trading.
The stock index of the Nasdaq stock market for dummies
The main peculiarity of this index lies in the ability of the quarterly making уточняемого the weight factor for each individual action. Although it is believed that this factor makes the index more unpredictable. But, according to many analysts, is extremely useful.
The FTSE stock market for dummies
In this index includes the shares of 30 of the largest trading and industrial companies, such as the mining company Fresnillo, the software developers Autonomy, a transport company Stagecoach and others.
It is calculated by determining the geometric mean. Thus, the FTSE - there is a sample of the existing shares, by analogy with all other indices.
In the context of the current trade on the stock markets, there is own system of regulatory bodies. Depending on the member countries, organizational-administrative apparatus of control such bodies may have a different structure. But all the same, in most countries there is a two-tier system of governing bodies. The first level is the more large-scale. These include public authorities, carrying out regulation in the given sphere of activity. To the second level includes all of the organizations, which are created by participants of the stock market. These include various unions, exchanges and various associations. As regards the distribution of the role of the organizations belonging to one or another level of regulation, the authority between them are distributed according to the rules established in each individual country.
And in conclusion I would like to note that today the stock market for dummies exists as a global actor financial relations, where the securities have become the most important part of the development of market regulatory methods. The significance of the stock market is unquestionable, as through securities is ensured by the cash inflow in the appropriate sectors of the economy, which had a positive effect on their economic development. So the stock market at the present stage of its development is one of the most promising types of business.
