Stock Markets and the Significance of Economic Growth Worldwide

Stocks markets across the world have seen a massive growth. The recession that we are facing today has played spoilsport and has hindered growth, and this applies to the stock market sector as well. Emerging countries too are seeing a dramatic growth in the stock market investments.

Better profits are the main reason for the investors to look into stock markets as a viable option. In developing countries risks are low, and returns are generally higher. Bank research and statistics also prove that the SM in developing countries give better returns so it makes sense to diversify your investments not only across various sectors with the country but also diversify your portfolio across various developing nations.

Developing countries are showing structural reforms, economic and legislative changes, governments have either eliminated or liberalized capital restrictions and this has been a boon to the foreign investor. The improved flow of all important financial information and the strengthened investor laws and regulations have only beckoned the foreign investors to developing countries. Foreign investors see this as a great opportunity to rake in some money and carry if home happily.

Despite the boom in the SM foreign investors have to be careful as the recession has hit the world economy really hard and the international market will need some time to settle down. The economic turbulence and variations in national growth are some factors that will see a negative return even in developing countries.

The Asian market is seen to be quite attractive option for foreign investors. Investors want profits and the Latin American and Asian countries are fast emerging as gold mines as fast as SM are concerned. But do not forget that emerging countries need outside capital for growth and survival and with the proper inflow of equity and capital funds, emerging countries will stand to gain. But emerging countries should take care to note that liabilities grow fast and they should take proper measures to take maximum advantage of foreign funds.

Banks as well as the stock market go hand in hand to provide a stable economy. An encouraging stock market will do wonders for a developing nation. It will bring in capital and push the growth barometer to new levels. Both the banks as well as the stock market is essential to encourage the accumulation of capital and thus contribute wholesomely to improve productivity in all regions.

Understanding Stock Market Terms

The kind of jargon that is used by the stock market professional is often incomprehensible and very daunting to the newcomer in the field. But if you are getting into stock trading, it would a good time for you to start learning so that you don’t get left behind. Understanding stock market terms is very important if you are to succeed at trading, but thankfully, it is not a very difficult task.

One of the most commonly heard terms is about the stock market going ‘bearish’. This basically refers to a time when the market is beginning to slide and is likely to experience a fall. The opposite of this-when the market is doing well and is expected to keep rising-is called a ‘bullish’ market situation. A bullish market is supposed to be enthusiastic, with scope for quick profits, while a bearish market is considered cynical and racked by mutual suspicion. Simple as that! Now that you know the bulls and bears of the stock market, you should know what a ‘writer’ means in stock market jargon. A writer is not the genius artist of the Renaissance mode, but rather one who sells a stock option. Opposite to the writer is the one who buys the options, and he is called, quite simply, the ‘taker’. So, as you can see, it is not such a difficult task understanding stock market terms-a lot of it is just common sense.

Another terms that often comes up in stock market terminology is ‘leverage’. What ‘leverage’ means is basically the ability of a stock to make a large profit by putting in a small sum of money. This is an important term in knowing whether you stock is doing well or not. Another terminology you need to be familiar with is what is called a margin loan. A margin loan allows you to borrow funds so that you can buy more shares. These stocks then form your security and loan ratio. In the margin call, the borrower can ask for extra funds as security in case of a fall in the value of his stocks.

Stocks and shares are what companies put on the market for you to buy. On these stocks, the company gives you a dividend twice a year. Many people also choose to reinvest their dividends in stocks so that it can generate its own money at a pace faster than in the bank.

Stock market terms are multiplying with every passing day and you need to learn something new everyday to stay up to date on new developments. A knowledge of these terms and how they work is essential to succeeding on the stock market. You take some time understanding stock market terms, or you may end up making big mistakes and losing big money. So, in-depth knowledge is an integral part of investing wisely, making gains and getting rich. The rest won’t happen unless you know your way around the market. So, take your time and inform yourself and before long, you will see the dividends of your efforts show up in your bank account

A Brief History of the Stock Market

This article will give you a brief history of the stock market from its beginnings in 12th Century France and expanding into the world wide phenomena we have today.

They began in 12th century France when Courratiers de change started managing and regulating agricultural communities’ debts on behalf of banks. The Courratiers de change were essentially the first brokers.

The hub of trading had moved to Antwerp by the 1300s under the Van der Beurze family. Their home was the primary place of trading. News soon spread that the Van der Beurze was the place to go for all of the Flanders business.

The major commercial center in Venice got into the act in the mid 1300s. The first laws regarding insider trading developed here when, in 1361, the Venetian government outlawed the spreading of rumors intend to lower the price of government funds. Stock markets developed in Italy in Pisa, Verona, Genoa and Florence by the 1400s.

The Dutch began offering joint stock companies in the late 1500s. By 1602, the Dutch East India Company issued their first share on the Amsterdam Exchange which was the first company to offer stocks and bonds. The Dutch East India Company would go on to explore and colonize much of the world.

Many other developments that we now consider common developed on the Amsterdam exchange around that time including continuous trade, short selling, option trading, debt-equity swaps, merchant banking, unit trusts, and other such speculative instruments.

Today, stock markets exist in every developed country and many developing ones.

That’s a brief history of the stock market.