Stock Exchange
Stock Exchange (also called Stock Market or Share Market) is a market where brokers and traders buy or sell securities for either investment or speculation. Securities include shares, debentures, and others. Stock exchange serves as a link between investors and issuers.
Types of stock:
Common stock: registered shares that represent a proportional ownership in the company. These shares allow shareholders to have the right to get dividends and vote.
Preferred stock: not really as privileged as the name says. These shares are called proffered only because they have priority over the ordinary shares when the company goes bankrupted. In most cases, preferred stocks have no voting right and have fixed dividends. However, they might have a variable dividend depending on the company's dividend of common stock.
There are many factors that determine whether stock prices rise or fall. These include the media, the opinions of well-known investors, natural disasters, political and social unrest, risk, and supply and demand. If there are more sellers than buyers, stock prices will tend to fall. Conversely, when there are more buyers than sellers, stock prices tend to rise.
An investor needs to monitor a stock portfolio on a regular basis. The purpose is to see how stocks are performing and revise his investment plan and the stock valuation based on the new development in the stock market and the companies he has invested in.
Stock market index is a statistical indicator used in measurement of changes in the market value of a group of stocks/shares. It is also a method of measuring the value of a section of the stock market. The index value is termed “points”. If a stock is up three points, then it really means that the stock is up $3. Points should not be confused with percentages when talking about stocks.