The stock exchange market is a unity that provides services for traders and brokers to trade bonds, stock and other securities like shares, pooled investments, etc. The stock exchange market or security markets were known to many ancient people and the first noted proof is from the times of Mesopotamia. But it took centuries to the stock exchange market to develop and constitutes in the units that are familiar to us today.
The stock exchange market functions like an indicator of the economy. The market forces are controlling the raise and the fall of the share prices. When companies and the economy are normally stable the share prices on the stock exchange market usually remain stable, and the general outlook of the economy can bee seen in its growth and stability.
When an economic depression, recession, or financial crisis occurs, and this situation lasts for longer time, than this results into a crash on the stock exchange market and on the economy itself. The changes of the stock exchange market are an indicator of the general situation of the economy.
The stock exchange market has various implications in the economy.
Governments can raise money by selling bonds or shares that can be bought on the stock exchange market where members of the public can buy them. In this way the government is actually loaning these money needed for infrastructure improvements, housing estates or other projects that need to be conducted for public benefit.
The stock exchange market can create chances for investments for small investors by giving a chance to the people to buy shares as much as they can afford, giving an opportunity to these small investors to own shares from some companies as other large investors. When the price of the shares increases professional and non-professional investors, financially benefit from the dividend that is annually divided to all stock owners.
Public companies which are owned and managed by many shareowners members of the general public and trade with their shares on the stock exchange market usually tend to have better management than the privately owned companies. Members of the general public by investing money in shares on the stock exchange market instead of keeping them in the bank or spend them for general consumption, promote business and help different economy sectors like agriculture, industry, etc and by this help the economic growth, stability and productivity on many companies.
Of course for all those who are share owners on the stock exchange market there are lots of risks involved and opposed to earn lots of money very often people loose money. When the prices of the shares drop continuously than people who own them loose money, and they can not sell the shares because the price is too low, so they can only wait and hope for better times.
