A Simple Way To Understand The Stock Market

Photo by lo lo on Unsplash

So, what is the stock market? And how does it work?

Dating back to the 1600s, early trading companies moved goods like silk, gold, china, spices, art (and looted artifacts) across the globe using hundreds, and possibly thousands, of ships. However, such expeditions are expensive, so these trading companies sparked early trading agreements with wealthy private citizens. As a result, private citizens invested in these trade ships, supporting the voyages in exchange for shares in the profits. The early mass movement of goods also led to the development of insurance markets — though that is another story in itself.

Stock Market Today

For example, today a company will pitch its platform to major investors, who are given priority investment should they believe the company to be a good idea. Therefore, supporting the pitching company’s Initial Public Offering (IPO), which launches the company onto the Official Public Market. Once on the official public market, any company or individual who believes in the company’s success can buy a stock.

Editor-in-Chief | Journalist | Creative Director. Everything here is inspired by conversations with friends.

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