What Is the Stock Market About?
If you want to have an equity position in a company or wish to divest yourself of a stock, you will need a place to transact that business. The stock market is the venue to conduct buying and selling of stock tips and stock derivatives. The marketplace can be a physical location, or it can be accessed electronically. The New York Stock Exchange is one such example of a stock market.
The existence of a stock market can be traced back to the Roman Empire when the Empire contracted work out to “publicani, ” private groups that offered shares to investors. Following the Middle Ages, The Dutch East India Company in 1606 became the first company to issue stock, and can arguably be seen as the first multinational company.
The biggest stock exchange in the world is the New York Stock Exchange. The market value of all the companies listed on the exchange comes in at over $25,000,000,000,000. It began in New York on Wall Street in New York City in 1792. It has significantly grown to where it is not unusual to see more than 2,000,000,000 shares traded daily, with a value of over $41,000,000,000.
A stock market can be a place to make or lose an enormous amount of money. During bull markets, those holding significant numbers of shares in a company whose stock is in demand can realize handsome profits. Conversely, those with considerable stock ownership during bear markets can be subject to profound loss.
One of the most catastrophic events in the history of the NYSE began on Black Thursday. On October 24 of 1929 the value of most stocks dropped precipitously. This led to a selling panic five days later, a date which came to be known as Black Tuesday. The market value of company shares dropped by fourteen billion dollars. The “Crash” was a prime factor in ushering in the Great Depression.
Investors have long spent time trying to determine the next bull or bear market. What is new is that the Internet has had a profound impact on trading stock. Nowadays, investors can make a beeline straight to the exchange floor and buy or sell stocks at the touch of a few keys.
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