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Essay on history of stock exchange
Summary of the history of the stock market
Summary of the history of the stock market
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Every weekday from the hours of 10am to 4pm $169 billion dollars on average trades hands from one party to another. It’s the New York Stock Exchange and has been trading stocks since 1817. The stock market has a definite impact on our lives (just ask those who lived during The Great Depression.) It is an institution that has made people unfathomably wealthy, along with impossibly poor. Today the New York Stock Exchange has over 2,300 different companies trading stock valued at just over 16 trillion dollars.
Currently there are over one hundred unique stock exchanges throughout the world. A Stock exchange provides a means for companies to raise capital through issuing stock. This process begins when a private company files to issue an initial public offering or an IPO. Often time’s companies wish to seek assistance from investment banks or other financial institutions to help get the IPO started. An investment banker looks over the company’s financial statements and records to determine what the company is valued at. Then stocks are issued to stock exchanges for investors and traders to purchase. The company raises money by selling their shares of stock to investors. The company and the investors share a mutualistic relationship as the company is in need of capital and the investors that purchased the stock believe that the company will do well and in return the stock will grow. Stocks fluctuate based off of several economic indicators. These factors include inflation, the strength of the market and competition, trends, and many more depending on what you are investing in. These factors are, for the most part, unpredictable. Even events such as a national disaster or terrorist attack can greatly impact the stock ma...
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...chnology very similarly to what educators are facing now.
The stock market; all though enticing, is no get rich quick scheme. It is a rather complex economic system that can be found throughout the world. It has seen a great deal of changes since its inception. The history of the stock market is very much like that of a graph of a stock with plenty of ups and downs. Without all of its highs and lows we would not have the stock systems we have in place today. Today we have a system where the companies and traders have a mutualistic interest; for the stocks to excel. It is the talking point of many conversations along with being subject to much speculation. Stock markets are ever expanding as more and more IPO’s are being filed. With a platform in place to allow crucial funding to corporations, the stock market is one of the most important systems set in place.
The coins made in gold, silver and bronze were traded during Roman Empire and the shortage of coins created a barrier for money circulation. However with the establishment of paper money, a sophisticated banking, global clearing system and electronic money, the global financial system evolved with a worldwide framework of legal agreements. In the Global Financial market, foreign currencies issued by the world, countries are traded by the buyers and sellers using currency exchange rates. Now a day, it is very common practices of companies in one country to raise capital in a foreign country by listing their stocks on major foreign exchanges given the growth of equity markets are becoming more globalized (SNHU, 2015).
The stock market expanded rapidly during the period of 1921-1929. At this time investors were optimistic about the stock market, so they traded stocks, which caused the stock prices to rise. The stock market boom led to asset prices rising at a fast pace. Which in turn outweighed the true value of the assets. Eventually, since the stock market did not reflect the true value of the stock, this led to a huge bubble followed by a crash. This crash is also known as the Great Depression that led to a severe economic crisis in the United States.
In October 1929, the United States stock market crashed due to panic selling. This crash started a rippling effect that contributed to a worldwide economic crisis called the Great Depression. This crash was such a shock because of the economic expansion of the 1920’s when the Dow Jones average reached an all-time high of three hundred eighty one. The year 1928 was a time of optimism and the stock market had become a place where everyday people truly believed that they could become rich. People everywhere were talking about the market and newspapers were reporting stories of ordinary people such as chauffeurs, maids, and teachers making millions off the stock market.
If the world, consisting of the consciences of over six billion people wants the market to grow, then the market will grow. With international interest and knowledge we can eliminate fraud and stock pooling to raise stock prices. The markets will be more honest, and they will grow at a rate that we need them to, in order to continue with our exceptional economic growth rate.
This paper is about the rise and fall of Mt. Gox, the first and largest Bitcoin exchange service, very similar to a stock exchange. Mt. Gox was based in Japan. It was launched in 2010, by 2013 it was processing 70% of all Bitcoin transactions globally, but in February of 2014, the company realized it had no Bitcoins left in its “vault”. The company had literally lost billions of dollars in Bit...
The United States signaled a new era after the end of World War I. It was an era of hopefulness when many people invested their money that was under the mattresses at home or in the bank into the stock market. People migrated to the prosperous cities with the hopes of finding much better life. In the 1920s, the stock market reputation did not appear to be a risky investment, until 1929.First noticeable in 1925, the stock market prices began to rise as more people invested their money. During 1925 and 1926, the stock prices vacillated but in 1927, it had an upward trend. The stock market boom had started by 1928. The stock market was no longer a long-term investment because the boom changed the investor’s way of thinking (“The Stock Market Crash of 1929”). The Stock Market Crash of 1929 was a mass hysteria because of people investing without any prior knowledge and the after effects that eventually led to the Great Depression.
With purchasing stocks there is always the risk of losing all your money, but many people didn’t expect that considering how well the economy was doing. In Document two, an excerpt from Ladies Home Journal describes how a man can become rich by slowly saving his money over the course of 20 years. However, many people in that period wanted to get rich fast which would be lead to the stock market crash. The New York Stock Exchange is a major factor of the stock market crash.
“There were no smiles. There were no tears either. Just the camaraderie of fellow-sufferers. Everybody wanted to tell his neighbor how much he had lost. Nobody wanted to listen. It was too repetitious a tale” (The New York Times, World History Book). The stock market crash was only one of many contributions leading up to the Great Depression. There were many economic and societal conditions that worsened throughout this time. Luckily there have been documentaries on the life that was lived by the people and how they got through it, just like the character in the movie Cinderella Man, Jim Braddock. Millions of Americans and even people across the globe were hit and somewhat effected by this tragic period in history.
The stock market is a vehicle to invest money. It is where consumers buy and sell fractions of companies, and is referred to as stocks. A proven method to achieve wealth while keeping up with inflation, comprised of publically held companies who offer goods and services that are used by the general public daily. Companies sell stocks to public investors in a free and open market environment on a daily basis, which is an effective strategy to build a sound financial future.
Beginning on Black Tuesday, October 29th, 1929, a total of 14 billion dollars was lost in America’s economy. Near the end of the week the 14 billion turned into a total of 30 billion dollars (The Great Depression Facts). Many events during the Stock Market Crash caused damage to the economy and lifestyle of the country, ending with recuperations from The Depression.
During the 1920s, approximately 20 million Americans took advantage of post-war prosperity by purchasing shares of stock in various securities exchanges. When the stock market crashed in 1929, the fortunes of many investors were lost. In addition, banks lost great sums of money in the Crash because they had invested heavily in the markets. When people feared their banks might not be able to pay back the money that depositors had in their accounts, a “run” on the banking system caused many bank failures. After the crash, public confidence in the market and the economy fell sharply. In response, Congress held hearings to identify the problems and look for solutions; the answer was found in the new SEC. The Commission was established in 1934 to enforce new securities laws that were passed with the Securities Act of 1933 and the Securities Exchange Act of 1934. The two new laws stated that “Companies publicly offering securities must tell the public the truth about their businesses, the securities they are selling and the risks involved in the investing.” Secondly, “People who sell and trade securities must treat investors fairly and honestly, putting investors’ interests first.”2
In the nineteen twenties the DOW hit an all time low with a decrease of ninety percent. The reason why the stocks fell were because twelve point nine million dollars in stocks were sold on just one day. That’s three times the amount sold on any other normal day. Over the course of the next couple of days stock prices dropped twenty-three percent. With americans spending money erratically on all these stocks, it was actually sending America into a downward spiral. Americans started buying stocks because they were starting to make more money and living the “American Dream” and owning stocks was apart of that dream.
Individuals are always confronted with decisions. America is changing into being more materialistic and it is becoming a problem in schools. It may be a matter of constrained time. The economy is critical on the grounds that it widens our comprehension, which thusly enhances the expectations for everyday comforts. Matters of trade and profit are paramount to ordinary life on the grounds that it gives social order an adjusted and composed framework for cash administration and business cycles. What ties the individuals and their lives together is the manner by which they choose to settle on the decisions against the risk of lack. The economy is about why individuals settle on the decisions they do and what the suggestions or impacts of those decisions are, and it assumes a significant part in everyone's lives. As America advances in technology, our materialism appears to grow and technology has become a tool for distracting individuals.
The stock market is an essential part of a free-market economy, such as America’s. This is because it provides companies the capital they need in exchange for giving away small parts of ownership in their company to investors. The stock market works by letting different companies sell stocks to gain capital, meaning they sell shares of their company through an exchange system in order to make more money. Stocks represent a small amount of ownership in a company. The more stocks a person owns, the more ownership they have of that company. Stocks also represent shares in a company, which are equal parts in which the company’s capital is divided, entitling a shareholder to a portion of the company’s profits. Lastly, all of the buying and selling of stocks happens at an exchange. An exchange is a system or market in which stocks can be bought and sold within or between countries. All of these aspects together create the stock market.
Whether it is dealing with the stock market, electronic commerce, portfolio diversification, or just simply allocating your assets, finance is more than just managing money. As technology progresses, the financial industry will advance and the demand for financial planners and managers could go down. However, there is no specific formula for allocating your wealth or for investing in the stock market. Every person and company is different, and the stock market changes constantly. People will always be running a business or a school, saving for retirement, financing a home, and investing their money. That is one of the reasons why I find finance so fascinating. Even if you aren’t making a career out of it, economic and monetary skills are vital for the rest of your life. Needless to say, finance is and always will be a diverse and ever-changing