Stock exchangeIn most countries in the world the economic system in place is Capitalism, a system in which the market, as in trade with private property drives the economy, and the main goal is profit. The stock exchange is the organized and regulated financial market where securities are bought and sold.
On the stock market, instead of goods and services, stock can be bought and sold – as in part of a company; through which we become part owners in said company. There are many different types of stock, but the founder’s share is the most common.
The commodity exchange is the centre of the exchange of certain goods. While on the stock market we can exchange shares, here we can exchange goods such as grain or coffee.
How does the Stock Market work?
In everyday life we usually purchase item for our daily needs, but on the stock market people buy stock in hope to sell on the stock later for a higher price – as in to create profit. If, for example, you decide to buy stock in a new clothing brand and half a year later it becomes world famous, you are very lucky: due to its high revenue the stock prices will increase and you can sell your stock for much more than you had bought it for initially.
Of course, this is not always this simple, there are a lot of global economic factors that influence stock value. It is very easy to lose our money due to the many factors involved, and often we do not get an early sign through which we can profit for sure. You can only speculate what is worth investing in. This part is a bit like betting: a football team may be good, but you can never know for sure if they will win a certain game.
A bond is a debt investment in which you loan money for a defined period of time at either a variable or fixed rate. (Some bonds do not only include money but services or other grants) Some contracts are called bonds but due to their content cannot be viewed as such – for example the insurance bond.