A stock is a share in a company, and the stock is worth part of the issuing company’s assets and profits. We call the first time a company sells stocks its initial public offering (IPO) and it’s sold on the primary market. The primary market implies it is the stock’s first time selling. In order to resell the stocks, the seller turns to the secondary market, commonly called the stock market.
There are 60 major secondary markets worldwide. We affectionately dub the top 16 “The $1Trillion Club” because the market capitalization of their component stocks is over $1 Trillion Dollars. 87% of the world trade takes place through the $1 Trillion Club’s markets.
Determined through the law of supply and demand, a stock’s price will fluctuate because of several factors:
- Revenue Growth
- Historical Price
- Earnings per share
- Price /earnings ratio
To invest in the stock market, you must employ a middleman. The types are an online brokerage, a stockbroker, a financial advisor, or a robo-advisor.