The stock market
worldwide is establishing an investment center, where there is a relationship
between the saver and the investor. The saver seeks to place money to obtain a
return, and in the case of companies, they need capital to invest in the
development of their businesses. This action is carried out without banking or
financial intermediation.
It is critical
to point out that the Stock Exchanges are capital markets that complement the
traditional Financial System. The shares of the companies listed on that market
are risk securities for the investor.
Considering that
the stock exchange is a private organization that offers the purchase and sale
of securities such as company shares and public and private bonds to natural or
legal persons who wish to invest in them, we will tell you its importance.
The importance
of the stock market in the economy lies in the fact that the resources invested
through this stock market allow both companies and governments to finance
productive and development projects and the generation of jobs so it is
imperative for one to be trained in trading and for that one can join a share market training institute.
Through the
stock market, the financial resources of those agents with surplus resources
can be channeled and taken to the economic agents that have a deficit in these,
such as entrepreneurs, which strengthens the production and generation of
wealth processes in the country's economy.
Other important
points of the Stock Exchanges are the following:
• It is an
instrument of great importance in the market since if you have capital; you can
invest it and start creating long-term savings.
• The Stock
Exchanges are mobilizers of large investment volumes, which allows small
investors or savers to agree to share in the benefits and risks of different
business initiatives.
• The stock
market provides financing and investment alternatives, which strengthens the
economies of the countries.
• Suppose the
stock market is compared with traditional banking. In that case, one can
establish that the financing mechanism offered by the exchange implies lower
and varied financing costs, unlike banks where, as the financing is higher, it
makes the loans more expensive. Consumer goods and services.
• The stock
exchange allows centralizing the supply and demand of securities, promoting
those interested in investing through the public offering.
Importance of
investing in stocks
The primary
reason investors invest in stocks is that they present the most formidable
potential returns. And in the long run, no other type of investment tends to
deliver better returns.
You must bear in
mind that investing in stocks is usually risky due to the market's high
volatility; however, if risks are well managed and a medium or long term
remains, the investor can take advantage of the stock market to secure their
financial position earn money.
One of the main
benefits of investing in the stock market is the ability to generate higher
returns. It is proven that the market tends to go up in value over time, even
though individual stock prices go up and down every day.
Investing in
many different stocks helps the investor build a well-diversified portfolio, as
growth in various sectors of the economy will result in a profit even if some
of their stores lose value.
Another advantage
of stocks is liquidity. You cannot quickly access money invested in some types
of investments (for example, bonds) until the asset matures.
On the contrary,
buying shares allows investors to sell them at any time, without limit. You can
quickly transfer the amount resulting from this transaction to your bank
accounts.
On the other
hand, some stocks provide income in the form of dividends. These payments
represent income in addition to the proceeds from the sale of the shares.
Dividend income can help fund more investments as the portfolio grows over
time.
An investment in
the stock market has the advantage of providing diversification. Investments in
stocks change in value independently of other types of investments, so holding
stocks within a portfolio can help you cope with the losses of different
investment products.It is important to note that investing in the
market is essential for good money management because it guarantees present and
future financial security. To become skilled in trading joining share market
training institute is recommended.