Why are stocks down today ? In this blog post we will explain in a simple way how a stock and the stock market works. Companies can finance their development, in particular by issuing financial securities (shares or bonds).
Stock market ?
The stock market is a market: investors can buy and sell their securities. When stocks and bonds are listed on a stock exchange, their value will rise or fall depending on supply and demand. Investors expect the value of their securities to rise.
Market ?
The market increases as shares and bonds are listed in the market of the company or other companies, and the increase depends on the market, especially if there is a recession and other problems. Investors invest in stocks and bonds because there are many of them. They want to see the same price of the securities as stock, because they need to keep the market close at all times. If prices are higher than forecast, they sell the securities or simply sell them off. The only difference between the two is that the exchange is the financial institution that decides what to sell at the first move in a stock market. The market price varies between the investors and the financial institutions.