The stock market refers to the collection of markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly-held companies take place.
Stock markets are where individual and institutional investors come together to buy and sell shares in a public venue. Nowadays these exchanges exist as electronic marketplaces. Share prices are set by supply and demand in the market as buyers and sellers place orders the thought of investing in the stock market scares you, you are not alone. Individuals with very limited experience in stock investing are either terrified by horror stories of the average investor losing 50% of their portfolio value.
Even if you don’t invest, the stock market’s health affects you. The majority of people turn to the performance of a country’s stock market as the best indicator of how well that economy is doing. Stock markets cover all industries across all sectors of the economy. This means they serve as a barometer of what cycle the economy is in and the hopes and fears of the population who generate growth and wealth.
Stock markets promote investment. The raising of capital allows companies to grow their businesses, expand operations and create jobs in the economy. This investment is a key driver for economic trade, growth, and prosperity.
In Pakistan majority of the people when thinking about the stocks, they get afraid due to lack of awareness. The government should initiate the projects for the awareness of stocks so that even a small company can list itself on Pakistan Stock exchange.
It could be a source of business investment for Pakistan if firms in the country offer new shares to finance investment. This could lead to more jobs and growth. The stock market can be a source of private finance when bank finance is limited. However, the stock market is not usually the first source of finance. Most investment is usually financed through bank loans rather than share options.
The stock market only plays a limited role in determining investment and jobs. With the right policies in place, exchanges can play an important role in fostering economic development and innovation. This is an important function by itself. However, there is increasing recognition that to address the challenges of the twenty-first century, stock literacy is the need of the hour.
Written By Hamza Aheer |Jhang