The results of stock market discussions attract a lot of influence. What is the Dow Jones Index? What are securities? What does a stockbroker do? How does it really work? Events that take place on Wall Street affect the conduct of everyday business, and this, in turn, affects directly the average customer, such as you. Read this article and you will understand what is happening on Wall Street and why you should be interested in it.
Stock Market Review
The stock market is a series of exchange operations, where securities (company shares) are traded. Stocks, securities, which in some way bring together sellers and buyers in one place, shares are also listed there and they are also traded. There are several internationally recognized financial centers such as New York, London, Tokyo, Germany.
In the U.S., stocks are traded on exchanges such as the New York Stock Exchange (NYSE), located on Wall Street. In addition to it, there is also the Nasdaq stock exchange. Usually, securities were traded on the Nasdaq “out of the window”, but now all types of securities are traded there. Shares can be listed on any exchange as long as they meet the placement requirements, but in general they are listed on the Nasdaq.
Stock Market Norms
Securities and Exchange Commission (SEC) This is the supervisory authority that keeps the stock market in order. The SEC is a federal agency whose mission, it claims, is to protect investors, maintain an honest, orderly, efficient market, and simplify capital formation! Is a federal agency that is independent of the political party in power.
Type of securities
There are two types of securities – those that are sold from the window, and those that are listed. Those securities that are sold from the window can be traded by the parties, as a rule, trading is carried out through the dealer’s network. They are not listed on the exchange, but they can be listed on the pink pages. Often, such securities do not meet the requirements to be listed and have a low turnover rate, for example, if the company that owns the shares is not in the best condition, or the company trades in small volumes. Here, as a rule, companies that have gone bankrupt are also listed.
OTC shares, as a rule, do not comply with the requirements of the SEC, and such compliance is not required from them, so it is difficult to find reliable information on them. The lack of information makes investing in pink stocks as unreliable as investing in private companies – investors should familiarize themselves with the company in more detail before they can be convinced of the quality of the securities.
Shares in the lists are stocks that are traded on the stock exchange. These shares comply with certain SEC rules, as well as the requirements of the exchanges on which they are mentioned.
Players
Many players are associated with the stock market, including brokers providing securities trading services, traders, analysts, portfolio managers, bankers. Everyone has a unique role, but many roles intertwine with each other and create the market as it is, as well as make it work efficiently.
Brokers, also known as U.S. registered representatives, are licensed professionals who buy and sell securities on behalf of investors. Brokers act as intermediaries between exchanges and investors, buying securities on behalf of investors.
Analysts examine and evaluate securities by how they are bought, sold, or held. The results of the study are disseminated to clients and other interested parties, and based on them, a decision is made on whether to buy or sell securities. Portfolio managers are professionals who manage a client’s stock portfolio. These managers give recommendations from analysts and decide on the sale / purchase of securities from the portfolio. Mutual funds, hedge funds, pension funds often use the services of portfolio managers as investment professionals.
Bankers represent companies, to varying degrees, such as private companies that are trying to go public, or companies in the process of merging or buying a company.
Measurement
Indices are used to measure changes in the stock market. There are a huge number of different indices, and each of them represents a certain type of securities. For example, the Dov Jones Industrial Average (DJIA) – this index is probably the most often used in the media in the news. Dov consists of the 30 most significant types of securities in the United States, and the daily index shows how these stocks behave throughout the day. The average Dov index is the average value of the price, calculated on the basis of the average value of the stock price.
The S&P 500 includes more than 500 of the most important capital securities traded in the United States. As a rule, these two indices are taken by representatives of all sectors of the economy in the United States, and they are the main units of measurement in the US market. There are numerous other indices that represent midsize companies and small businesses in the United States, such as the Russell 2000 for example.)
Findings
The stock market is a global market where goods and services are bought and sold as securities. This is an organized market, with rules, general principles, various players involved in the movement of securities. Each player is closely connected with other players, each creates a system that is an effective market.
Players carefully monitor indices that measure the significance and value of these securities, and important data from Main Street helps to assess the overall state of the economy. The stock market is a kind of financial barometer that has become an integral and important part of the decision-making process for every citizen of America, from the average man in the street to the richest businessman. So, even if you have not invested a cent in securities, you still need to understand the principles by which the market works.
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