The stock market we are enjoying today has been as a result of the monopoly of the Dutch India company. This company traded in gold, spices, silk, etc. They were shipping goods on a massive scale all around the world. Once it got expensive to run their products, and the need for wider shipment arose, they came up with a solution.
This solution was the first stock market. Today, a lot of companies turn to investors for investment in their projects, ideas, and innovations.
Companies launch themselves in the market by advertising and hoping to gain investors, and if their projects are full of potentials, the investors chip in their IPO (initial public offering).
From here, the company will be listed in the public market, and anyone can start purchasing shares in hopes of a profit. The money these companies receive is then used to fund projects, and grow.
As the company grows, more people invest and a supply and demand chain will be created. With the growth in demand, comes a tight supply chain, and a further increase in the price of shares.
The beauty of this increase is the value it adds to the company’s stock. This makes their share more desirable, and a growth in the company.
With the way life is programmed, just as much as the value of the company increase, anything could happen and that leads to a hit and the prices come crashing down.
This doesn’t mean the project had become useless, no, it could be as a result of a tweet by the CEO that makes the investors feel bad. It could also be other factors such as the pandemic, government bailouts, laws, trade policies, technology, etc.
And once the company starts experiencing a hit, people are likely to sell their stocks before they run into losses. The demand for stocks and shares will decline, the market value and price will reduce too. However, all can go up again.
Now, this is the why the charts of stock takes different forms, and movement on a daily basis. With this knowledge, the stock market is very risky, and it is advisable for investors to take up long-term investments for safety purposes.
Today, anyone can begin the journey into the stock market. All you need an internet connection, the right platform, and the motivation to learn how it works, you can then go on and educated yourself about trading and trends, using the available resources on the internet.
Therefore, do your research, study, and learn. When you are well-grounded with the basics, you can go on, and become part of the market’s movement.