At all times, more due to ignorance or bad luck, the world of the stock market has been dangerous and a place where losing money is almost certain.
Many people think of the stock market as a place where money is played and, for example, in a casino, you depend on chance to win or lose.
In the world of the stock market there are two completely different scenarios, those that have ever earned a lot of money and those that have lost even more than they should. Obviously, whether we talk about profits or losses, the stock market is not a game of chance.
With this we want you to be aware that investing is not a game, but it is not a method to lose money because then, how do more and more people decide to invest? Those who left less benefited from an investment will of course discourage you when it comes to investing and even they may not bet on the stock market again.
We are going to encourage you to at least understand the mechanism of investing in the stock market and observe for yourself whether or not it is worth investing.
To talk about the Stock Exchange, you must first begin by explaining what it is, so you should know that the stock exchange is a private organization that offers its members the possibility of generating benefits through purchase and sale orders and negotiations.
In stock markets, securities are traded based on known prices that are set in real time. It is a regularized market, where investors will enjoy a secure environment to carry out their transactions.
The Stock Exchange helps boost economic and financial development and this strengthens the capital market of the different countries of the world. In our case, that of Spain. In the Exchange we can highlight three main participants:
Companies, which can sell their shares to the public for financing.
Savers, who become investors who benefit from dividends.
The State, because through the Exchange they can also find financing and take care of public expenses, as well as carry out works of a social nature.
In the Stock Exchange they are negotiated with the purchase and sale of all types of securities, such as stocks, public and private bonds, participation securities and other types of investment instruments. Usually, there is a lot of trading with stocks, as there are very solid companies and many operators see an opportunity becoming shareholders.
Bubble pop dot com
Many of these people suffered in a very different way the bursting of the bubble of internet-linked companies better known as the dot com bubble.
Between 1997 and 2001, these types of companies rose like foam as it was a new market, the Internet. At the time the closures began and a smooth but long recession of this type of business. Some of those who lost investments possibly put aside the results that were giving small losses every day or were too confident when thinking that it was just a bad run.
Others at the time they were living decided to leave soon taking with them interesting benefits. Both used the same way when investing but the decisions they made during their investment obtained very different results.
Really, investments in the stock market can have many risks, but how you see the attitude of the investor can also do a lot, since in this case there are those who did not notice the losses until it was too late and others who instead managed to get out on time With some benefits.
How the stock market works
When a company decides to sell shares in the stock market we must understand this as a need for capital to be financed but without resorting to expensive loans from a bank where they should pay interest in a short period of time. A company that wants to go public may be thinking of expanding its market by opening new offices or expanding the staff hired to multiply its production.
That entails an expense and of course, it must be paid in advance since the benefits do not usually occur in the first moments.
If you decide to buy shares, you are part of the company, you will carry with you both the benefits you get, and the losses you may suffer. Therefore, before investing, you must carry out a preliminary study of the possibilities of each asset. No one blindly bets on the actions of a company, it has to see that it is solvent and that of course its future is promising.