The stock market is a key part of the world economy and one of the biggest platforms for buying and selling shares and stock. Made up of hundreds of stock markets all over the world, millions of companies are listed on the stock market and thousands of shares are bought and sold everyday by people all over the globe. Although there are many stock markets around the world, several big stock markets are the New York Stock Exchange, the Hong Kong Stock Exchange, the London Stock Exchange Group and the Japan Stock Exchange Group.
The world of stocks and shares is made up of tens of specialized words such as a dividend which is a sum of money paid regularly from a company's profits to its shareholders and the amount can vary for how much stock they’re bought and how much profit the company has made. Another key word in the world of stocks and shares is a mutual fund, which is a type of investment where you pool money with other investors and give it to a professional manager who takes care of your money and advises you on what decisions to make. The money pooled is called a portfolio and the professional manager looks after the portfolio. Another key word is Supply and Demand which is basically the amount of produce or service made or available over the demand for that particular product. A factor which affects supply and demand is that if the price goes up the demand for the produce goes down. However increasing the price increases the supply as selling a higher quantity at a higher price increases revenue. These are called the law of demand and the law of supply. Supply and demand affects the stock market because it determines the price of the stocks on the market. A ticker symbol is a collection of characters which represent a listed security (a company which had paid to be listed on a particular stock exchange) and ticker symbols differ from market to market because there are always different securities on different markets. The pros of investing in the stock market are that if you make a good decision you can make substantial returns and make a lot of profit. Another pro is that you have thousands of companies around the world to choose from and you are not limited to only a few companies and that you can buy and sell your shares whenever you like. The cons are that you can experience huge losses as the stock market can be very volatile and crash and investing can be very time consuming. It basically risk vs gain. Finally the definitions of the most important terms in the stock market which is stock, which means a share of a company owned by an individual or a group. Companies use stock to raise their capital and they are given to a shareholder when they buy the stock on the exchange. Share means a unit of ownership that represent how much the owner has bought of the company and how much money they are entitled to.
From doing this project, I now have a much deeper understanding of the stock market and how it fluctuates and changes and how it can be affected by many outside real life events. Starting this project I had five companies which I had invested in. These were Boohoo, Experian, Vodafone, Next and BAE Systems. From the beginning of the project Next began to go downhill rapidly and I started selling the stocks off bit by bit until I had completely sold them all off. I lost money when selling but in the long run it was a good decision. One of my other companies, Boohoo, did well for the duration of the entire project, and I slowly bought more and more shares in it until I had reached my 2000 euro spending limit. Experian stayed steady for ¾ of the project but near the end the value of the stock began to decrease. Vodafone was very similar to Experian, staying steady with small ups and downs but near the end of the project Vodafone stock value began decreasing. Finally my last company was BAE Systems. During the beginning half BAE Systems share price had decreased since I had bought it but in the last half, it had increased by a large amount. Boohoo was so successful due to the fact that online retailing is the next big thing, as people are more and more inclined to stay at home and shop as opposed to having to go to the nearby store. BAE Systems began to increase directly after Donald Trump was elected the next President of the USA whereas both Vodafone and Experian began to decrease after Donald Trump's election. However due to the quantity I have bought in BAE and its value, it was much more beneficial that BAE was doing well as opposed to Vodafone and Experian. If I were to redo this project I would not buy in Next or sell its stocks so slowly and be more aware of the fact that when companies are starting to do bad to sell my stocks so as to not lose too much money. I would invest in all of my current companies excluding Next if I were to do this again but I would keep a close eye on Experian and Vodafone. I probably wouldn’t invest in any other companies other than these 4 due to the fact that they worked well. From doing this project I have learnt about all the different keywords about the stock market, I have learnt that the value of stocks can be very reliant on outside events and that if you really want to invest in companies, you must invest large portions of your life to making sure your stocks are doing well. I have also learnt that there are different companies for different times depending on what investing approach you want to take and how the financial and political world is doing. All in all I have thoroughly enjoyed this project, and I feel like the stock market is much easier to understand now.