It’s true that most of us are eager to learn the nuances of stock trading and look out for step by step instructions on how to invest in stocks and how to make profits out of it but not many of us know the historical background of stock markets and how they came into existence and how the market functions today under this so unstable financial environment. So, let us look in brief about the history of stock markets and how trading started off.
Establishment of the stock market
It all started about 200 years ago in the United States where it was established mainly for companies to collect interest free capital and also for the government to get money.
Even to this day it is considered the easiest way for the companies to collect the funds it requires for day to day operations instead of going through a lot of hassles for seeking high interest funding from a Bank or federal government.
When you are investing in stock market what you are actually doing is you are providing capital to the company in exchange for a share in the company’s ownership. This share can be kept with you till such time you wish to sell it off to make a profit out of it. But you have to wait for the right time to do so; i.e., when the markets are up and the stocks of that particular company are doing well.
How to invest in stock market?
If you wish to invest in stock market you will have to acquaint yourself with how the market functions and learn about the basics first.
Next you will have to do some research on the various types of investments that are there in the market and the returns that are possible to earn out of them.
You need to decide if you wish to opt for long term or short term investments; beginners are usually better off starting with long term investments since they are less risky and not as volatile.
If you are a beginner it is always better to learn from investors who have more experience in this field and better still if you look for a group of investors who can assist you in developing your portfolio.
With time and after a couple of mistakes one is bound to become a better judge on when to buy and when to sell stocks to be able to make the most returns.
But to be a committed stock market trader you need to devote more of your time to learn the intricacies and nuances of this investment and if time is a short commodity for you it is best to utilize the services of stock brokers who offer various valuable services and advice on how to go about the whole thing and stay in it without burning your fingers.
And looking into the history of stock market trading you will get to know how the whole thing evolved and how it works and soon you will become a pro yourself!