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Summary

What is the stock market?

A certain friend once had a speculative idea, of the stock market being a center where people screamed all day. He also strongly believed that it was some sort of financial battlefield, where you killed or escaped with bruises. Thanks to the advent of technology, the stock market is technically virtual and physically safe.

A stock market is a place for the financially wise and disciplined, who are willing to make investments for a substantial reward. In the subsequent paragraphs, the rudiments of trading on the stock market will be extensively discussed. What it is, the way it works, its history and evolution, and why you need to invest in it.

The stock market, also called an equity or share market, can be likened to a globalized market place. But in this case, the goods and services [virtual] provided primarily, are termed "stocks" - stocks are basically, shares of a company. Picture an apple pie, representing a company - each slice translates to a company’s share value, a bigger pie promises a generous slice.

Stocks, albeit its popularity, are not traded solely on the stock market. Other financial securities are involved. This could be corporate bonds, exchange-traded funds, etc.

The perks of owning a share lie in the ability of the company to rake in profits. As stated in the apple pie analogy, buying stocks is a little risk dependent. But, greater risks, guarantees a greater reward.

While stocks are said to be the shares in a company’s ownership or profits, bonds are a debt owed by the company. Instead of taking a loan directly from a bank, a company [being a distinctive legal entity], can borrow from individuals. These individuals are said to have purchased a bond, and bonds pose fewer risks than stocks. A company facing bankruptcy would be forced to sell its assets to repay its debts, while its shareholders come last.

The stock market, therefore, is simply a conglomerate of buyers, sellers and intermediaries trading stocks and other financial securities. A booming stock market is essential to overall economic stability as it allows companies to access funds from the masses. A total of about 69 trillion dollars are traded on the stock market a year, surpassing the entire world economy.

So, while money makes the world go round, the stock market is the pedestal on which it rotates. 

©2019 Eric Williams (P)2019 Eric Williams

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  • Nancy
  • 23-06-19

wonderful book

This is a wonderful book. I would recommend it to anyone with a firm grasp of the basics, or as a tune-up for advanced users.

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  • Vijay riyas
  • 18-06-19

Useful book

I find myself going back to it often for easy to understand explanations about stock terms. I think I would even enjoy it even if I wasn't investing in the stock market.

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  • Kelly
  • 18-06-19

Loveit

This book is very good at what it aims to do. This book is a great first read about the stock market. This really is a great book for anyone trying to get into trading.

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  • Bayoona
  • 18-06-19

Great book

To become a pro, you have to be dedicated to understanding how the market works and how you could profit from implementing several strategies.

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  • Aila
  • 18-06-19

Good book

This book includes some simple steps how to transform you from a newbie to a pro. Having a larger picture in mind, the ideas shared in this book only gets you started.

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  • footlose
  • 18-06-19

Knowlegeble book

I believe everyone should have a personal mission statement and Dalio takes this a step further by systematizing your entire life's principles he also pushes to dream audaciously which is awesome.

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  • Eman
  • 18-06-19

Must listen to it

I have personally wrote trading algorithms and it's interesting to see how Dalio has systematized these principles to his life and business.

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  • Israf
  • 18-06-19

Information book

I picked up this book to gain the insights of one of the biggest fund managers and I think there is a ton of great life lessons to learn in this book.

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  • Durga. R
  • 18-06-19

Great book

I know now that technical analysis is an important tool for any investor. I really liked this book and would recommend anyone who needs such type of information.

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  • riya
  • 18-06-19

Good book

Having a larger picture in mind, the ideas shared in this book only gets you started. To become a pro, you have to be dedicated to understanding how the market works and how you could profit from implementing several strategies