Historically, the stock market was an entity that eluded most individuals who were not able to spend vast amounts of money on risky trades. Today, it is much more accessible, and everyone can invest. The very first stock market began in London as the London Stock Exchange, which started in a coffeehouse. Traders would meet over a cup of coffee to exchange shares.
The first stock market in the US originated in Philadelphia in 1790. The start of the New York Stock Exchange began in 1792 with the signing of the Buttonwood Agreement, and so Wall Street was born. It was originally named the New York Stock and Exchange Board in 1817, and now it is known all over the world.
What is a stock market?
The stock exchange is a highly regulated environment that is controlled by large regulators such as the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Shares are exchanged electronically now, but in the old days, those shares were issued on paper and investors needed to produce their physical shares as proof that they owned them. Stock markets are protected and regulated, so when you participate in transactions online, you can feel safe knowing that it is a secure transaction. It also ensures price discovery, transparency, liquidity, and fair dealings in all activities involving trades.
Investing in the stock market
The internet has made it easier than ever before for individuals to get involved in buying and selling shares and investing domestically and internationally. Some feel confident enough to invest using their own investment platform through a financial institution on an electronic device. Those who are new to investing generally feel that using an online company is the best way to access the best starter stocks to practice.
There are also online forums with a program that simulates a demo to learn the ins and outs of investing with virtual money until they feel comfortable. The best way to get started with the stock market is to speak to an online source such as AskTraders.com. It will be able to give you the best financial advice on the best starter stocks and how to begin your transactions. Once you get comfortable enough, you can move on to individual platforms for trading. One benefit of having professional advice is finding out about new innovations available to invest in that you may not have heard of.
Primary and secondary markets
Stock markets act as primary and secondary markets as defined by the regulator. The primary market lets companies issue and sell shares to the public under an initial public offering (IPO). This is useful in raising capital from investors. The stock market is the forum that facilitates these transactions. A secondary market is a forum where investors can buy and sell shares that they already own.
If you are interested in getting involved in trading stocks, the best course of action is to ask a professional first so that you get started on the right foot. Doing your own research into the stock market and how it operates is also useful when first learning how to invest yourself.