Are you keen to invest in the stock market? Know that the stock market is an institution of the financial system which is negotiating the purchase and sale of the shares of different companies. It can be scary to the investor who comes first in this market money. And that news has to do with sharp rises and falls in the stock market are always spectacular.
The first thing to know is that it is a market in which bonds or securities are traded, that you know that stocks and are simply small shares of a company. So, if you acquire securities of a company in the bag will become your landlord.
For the safety of the investor, only securities traded companies that are admitted to trading after a rigorous process and secured transactions are legally and economically.
Those involved in the stock market
In these transactions, involving all those investors, individuals and institutions that seek to obtain a return on their savings in the shortest time possible and with minimum risk, which buy and sell stocks according to changes in price, and that mediators are they contact the sellers and buyers.
The work is performed mediation and brokerage companies. The securities may act on their own or others (broker or dealer). They can invest in securities underwriting secure and provide for the purchase of securities. Agencies can only act as an employee and are not empowered to extend credit or to underwrite issues of securities.
It is the job of the Exchange
In the stock market facilitates the exchange of funds between companies that need funding and investors, is what is known as primary market: IPOs, capital increases …- and which subsequently provides liquidity to investors for buy and sell their titles, sub-market. Also set the share prices through the law of supply and demand. And, importantly, the investor reports on economic developments in listed companies.
CNMV is working
The four Spanish stock-Madrid, Barcelona, Bilbao and Valencia are regulated by the National Securities Market Commission (CNMV), a public entity whose core functions to direct the stock exchange system, to allow the admission of securities to trading, propose Authorization of companies and securities dealers, control and monitor the markets and institutions involved in them, inspect the securities markets and, most importantly, ensure transparency and investor protection.
How the Stock Exchange
In the “park” as it is known in financial jargon Bag, articulated two types of market. The outcry and the continuum.
Open outcry market is best known by the profane by Hollywood, but today is a marginal market with very little recruitment. The recruitment is done in the same building as the stock prices and shouting out and sells like an auction.
The electronic market is less romantic, but more effective because it uses a computer system to allow real-time hires. In fact, when news programs give contributions refer to the data in this market.
This system, called SIBE, in turn allows the interconnection of the four stock exchanges and intermediaries as both investors can be connected via computer terminals and receives real-time information also.
What are the actions
As stated in other chapters of this guide, are titles of ownership of a share capital of company owners go on sale to raise capital.
If you buy shares of a company in the stock, automatically acquired property rights that allow you to participate in the decisions taken at general meetings of shareholders through voting rights, a right that is proportional to the participation in the social capital, which is the same, the number of shares you purchase.
Also entitled to receive dividends if the company has made profits and the general meeting decides distribute to shareholders.
Be the first on the list when purchasing new shares in the company if it broad capital, thanks to pre-emptive rights.
Shares can be ordinary, which are the rights enjoyed by classics and privileged to have a number of advantages such as in distribution of profits or voting rights.
Out of stock market price, you may opt for syndicated shares, but if you opt for these alternatives will have to make an offer before the shareholders because they can not spread freely.
Other products
In addition to actions Bag offers the possibility of hiring other products such as public funds and private obligations.
Public funds are fixed income securities for debt issued by the State or other public entities. Public funds include the State’s public debt, as Treasury bills or government bonds, debt agencies, debt issued by Port or Board of Public Works, public debt of municipalities and other local corporations and regional governments, debt public companies and foreign securities guaranteed by the state.
To be guaranteed by the State, public debt is recognized as a maximum value of security and also usually have tax advantages.
If we talk about corporate bonds, we refer to debt securities in companies that have issued. They can be simple or not secured by mortgage, the only guarantee is that of the company-, and mortgages, obviously, they are guaranteed.
So are purchased titles
Buy on the stock market is as easy as opening a securities account in a brokerage company and go giving orders via phone, fax or Internet to buy or sell the titles you want. Also, depending on your heritage, you can build a portfolio to be managed by a professional.
Before hiring the service, ask for stock trading commissions, warehousing and administration.
How to operate in a Bag
Typically, operating cash, as in any market. That is, know that the delivery of securities and the payment thereof (the settlement) is done three days after hiring. Many times, banks advance payment of purchases at the same time of purchase, if you want to sell, not everyone is charging ahead.
But you can also make forward transactions to hire security, which will make the payment within a period agreed between buyer and seller. On the other hand, there are those having a double, which occurs when someone buys shares at a specified price with the promise they will return to be repurchased at a time and a certain price.
There are also derivatives (options) that give the right to buy or sell shares within a period and a specified price.
Ups and downs
You know a little more about the functioning of the Exchange. However, there are other factors that are more in the realm of what is called market climate are those that can give more of a shock and a joy to investors.
The bag is very sensitive to changes, so that any little economic or political change, sometimes social, can cause movement upward or downward.
Something that always affects the stock market much as changes in interest rates. For example, if the rate rises may cause declines in the prices which increase the financial burden of enterprises and worse outcomes. It also reduces the objective assessment of companies, because their benefits must produce a higher return than that offered by bonds, which is what has risen.
Indeed, corporate profits are the major force that moves the stock market. Rather, earnings expectations. Companies, in theory, should be discounted in price to generate profits in the medium term.
A rule of thumb is that for the stock market has no past, only the future. What are the expectations listed, hence the uncertainty surrounding the market and cause sharp fluctuations.
Other important factors that could affect market developments are certain financial measures such as liberalization of markets, the official tariff regulation (electricity, telephone, gas) or giving aid to certain enterprises, the implementation of tax investors or privatization of public enterprises.
Ultimately, the greatest joys and terrors come from the hand of new technologies.
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