What does Investing in the Stock Market really consist of?

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.
The bag
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.

Investment an economic and financial issue but also everyday

The concept of investment is used extensively in areas such as the economy, finance and business, although, although these are where it has a formal specification, the word investment is very present in our daily lives and not only Entrepreneurs, traders or stock traders think about investments, ordinary people do it because basically it will involve at least the duplication of a sum of money that is decided to place in favor of a business or a venture.

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That is, those of us who are not specialists in the areas mentioned can invest without problems in what we want, if we have a sum of money that allows us to do so. Even, the majority is advised with specialists or with people with experience in this sense because the idea is that an investment allows to improve the quality of life that is had.

Investments

Investment is an economic term that refers to the placement of capital in an operation, project or business initiative in order to recover it with interest in the event that it generates profits.

For the economy and finance, investments have to do both with saving, with the location of capital and aspects related to consumption. An investment is typically an amount of money that is made available to third parties, a company or a set of actions in order to increase the product of the profits generated by that fund or business project.
Every investment involves both a risk and an opportunity. A risk to the extent that the return of the money invested is not guaranteed, nor the profits. An opportunity in as much the success of the investment can imply the multiplication of the placed money.

In private investment, three different variables are usually considered. The expected return, that is, the profitability that is considered to be positive or negative. The accepted risk, that is, uncertainty about performance, the possibility that the investment will not recover. And finally the time horizon, or the short, medium or long term period during which the investment will be sustained.

Resultado de imagen para investment

In turn, an investment can be classified according to the object of the investment (equipment or machinery, raw materials, participation in shares, etc.), depending on the function in the enterprise (renovation, expansion, improvement or strategic), and according to the subject or company that makes the investment (private or public).

An investment is the basis of almost any economic project, since a new venture is usually based on the capital received for its management and, therefore, depends on the shareholders willing to assume the risk of investing in a new initiative of which no the future is known.