Buying and Selling Shares: How the Stock Market Works

Spread across the globe, there are many stock exchanges, actual markets, operating in many countries, Hong Kong, Japan, India, Germany, London, South America, Mexico and Canada, to name a few. And in America, there are a number of exchanges including the New York and the Nasdaq, a large netwok of computers linked to brokers, dealers, mutual funds and traders.
On these exchanges, a person buying stock in a company is buying from someone already owning shares, rather than the company itself. In these secondary markets people, corporations, and other institutions buy, sell and trade common and preferred stock, mutal funds and exchange traded funds.Get more information here. http://www.fool.com/investing/general/2011/08/25/idt-dividend-dynamo-or-the-next-blowup.aspx
Since there is a lot risk in buying and selling securtites an investor has to be careful in investing money because there is a good chance that it may be lost. So, the beginning investor has to look at profitable companies, with a history of profits and is a market leader either, the first second or third most profitable company in its industry. The investor should also look at the dividend record of a company and whether the company is projected to continue to pay a dividend in the future. A quarterly dividend is a nice reward for wise investing. When an investor investigates the financials, the competition, the outlook, the capital structure, the industry, he is doing “bottom-up” investing and the investor is buying the value and the future value of a specific company in a specific industry.
Macro-investors buy and sell stock based on large, global, national or regional economic outlooks. If interest rates are projected to be high in a country, or corporate profits are projected lower, the macro-investor will sell and not buy until the economic picture brightens.
The object of investing is to make money and to not lose capital.
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