The stock market is a type of capital market that operates around the world in which equities and fixed income are traded in a structured way, through the sale and purchase of marketable securities.
The set of rules and participants (issuers, intermediaries, investors and other economic agents) is intended to allow the process of:
Thus, the stock market includes the shares of companies and the negotiable securities equivalent to the shares. In addition to any other type of negotiable securities that give the right to acquire shares or securities equivalent to the shares, by their conversion or by the exercise of the rights they confer.
Public listing is identified in the market as a guarantee of solvency, transparency and prestige. Admission to the Stock Market itself implies recognition of the solvency of the company. Since it must demonstrate its ability to generate profits in recent periods.
Investors willing to contribute funds will value every effort made in the rationalization and professionalism of the company’s management. In this way, a constant incentive is generated to increase the competitiveness of the company.
In short, a company that is ready to go public has achieved a high degree of organization and control.
A stock index is a calculated average of selected stock prices representing a particular market or sector. An index can be thought of as a basket of stocks that provides a broad sample of a national industry, sector or economy. The collective performance of these stocks provides a good indication of the trends in the global market they represent.
In addition to allowing investors to track changes in the value of a stock market, indices also provide a useful benchmark against which to measure the success of investment media such as funds and equity portfolios.
The oldest American index in existence today is the Dow Jones Industrial Average or simply known as the Dow Jones. It was created by Charles Henry Dow in conjunction with the Wall Street Journal to measure the economic and financial activity of the United States of America in the late 19th century.
At the beginning it was made up of only 12 companies such as General Electric, North American Company or American Tobacco Company among others. Today it is made up of 30 companies.
Along with the Dow Jones, the rest of the main stock market indices in the world are: