Logo

Facts About Stocks in 2022

25 Facts You Absolutely Need to Know About Stocks

Contributors: Nicola Date, Katherine Read. Reviewed by Francis Hui

Are You Looking to Invest in the Stock Market & Actually Make Money? We've Listed the 25 Most Important Facts that You Need to Know Before You Take the Plunge. Read Them Now.

10 things you absolutely need to know about stocks

25 Facts About Stocks That Will Benefit Your Investments

Facebook
Twitter
LinkedIn

In its simplest form, the stock market is like knowing the exact amount of chilli to add to your recipe.

You don’t want something too bland, or something so hot that it sets your mouth on fire.

Knowing the right amount requires knowledge and experience.

If you want to succeed in the stock market, and at cooking–then knowing the right formulas will help!

Keep reading this article to understand the 25 most important facts about the stock market before making your first investment.

#1. The Stock Market Is More Than 400 Years Old

The stock market is one of the oldest forms of investment in the world.

It’s believed that the Dutch East India Company1 created a rudimentary form of the stock market back in 1602, known as “stocks.”

Stock Market Is Old

#2. There Are More Than 60 Stock Exchanges in the World

In modern times, there are more than 60 stock exchanges in the world.

The most famous of them is called NYSE Euronext, and it’s located on Wall Street.

There are also other big players like NASDAQ2 and hundreds of smaller ones that help to support financial markets all over the planet.

Stock Exchange

#3. Annually, The Stock Market Is Likely to Increase by 70%

There is a 70% chance the stock market will go up on any particular year, and only about 30-40% odds of it going down.

This makes it an attractive investment for many people who want to make money from their savings.

Likely To Go Up

#4. October Is the Most Volatile Month

Many people believe that October is a very volatile month for stocks, which might be because it’s near the end of the fiscal year in many countries.

It can also be related to the fact that during this time,

There are more rumors about prospective corporate takeovers as well as other significant economic events happening around the world.

Volatile Month

#5. September Is the Worst Month

One of the worst months for stocks is September.

This might be because people are so excited about how much they made during October that many investors decide to sell their shares to make a profit, which causes the stock value to drop.

worst month

#6. The Most Expensive Share Is Berkshire Hataway

The most expensive share in the world is Berkshire Hataway.

It has a current valuation of about £214 billion, making it over three times as big as Pepsi or Coca-Cola.

Berkshire Hathaway

#7. The Earliest Investing Book Dates From 1688

The earliest investing book published in the world is called “Principles of Trade”.

A trader named Nicholas Barbon wrote it back in 1688, making him a first in the sector to put together an investment guide.

Investing Book

#8. The First Stock Market Bubble Dates From 1720

A lot of people believe that the first stock market bubble was back in 1720.

This happened when John Law created an investment bank that had shares issued for it, but he also printed more money to invest.

The result was that not only did prices start going up as well as down quickly and wildly,

But this led to many other speculation-driven bubbles happening over the next century or so.

Stock Market Bubble

#9. Microsoft Breached the £1 Trillion Threshold

In April 2019 Microsoft was the first company to ever reach that figure, with Apple being the second.

These companies are valued at £909 billion and £893 billion, respectively.

Microsoft Threshold

#10. Top 100 Companies Distributed £704 Billion to Shareholders

In total, £704 billion has been distributed to shareholders by the top 100 companies in the past 12 months.

This is a tremendous amount of money that reflects how much return on investment they’re offering investors for putting their funds into these stocks.

shareholders

#11. Even Pirates Have a Stock Market

One of the earliest known was in 1783 when they were living in a piracy haven called Nassau,

Which is part of what’s now considered to be The Bahamas.

pirates

12. The Stock Market Recovers Relatively Quickly

The stock market is generally able to recover relatively quickly after it crashes.

In the 1930s, for example, it took about four years before stocks went up again following a crash in 1929 and subsequent depression of the economy due to The Great Depression.

Recover Quickly

#13. There Are More Mutual Funds Than You Think

There are more mutual funds than you might realize.

There’s been a total of £51 trillion worth of investments in these types of accounts over the last 15 years.

Mutual Fund

#14. Shares Were Traded With Fractions

Shares were traded with fractions until 2001,

Which means that an investor who bought a share at £100 might have owned 0.004 of the company instead of just one whole share.

Shares In Fraction

#15. The Dutch East India Company Was the First Multinational Corporation in Existence

The Dutch East India Company was the first multinational corporation in existence, and it traded everything from spices to silk, which made its stock very valuable.

First Multinational Corporation

#16. Calculated Risks Usually Mean More Rewards

People make money in the stock market by buying stocks3of companies they think are undervalued and will eventually appreciate.

They can also buy options contracts or use margin lending to magnify their returns on investments.

make money in stocks

#17. You Have a many Options When It Comes to Trading Stocks

Shares of stocks trade on the stock market.

This is where they can be bought and sold depending on what people are willing to pay for them at a given time.

Shares also trade in individual companies, but only among those who have ownership stakes in that company’s shares (i.e., shareholders).

stock trade

#18. Buy Low & Sell High

The most basic way to make money in stocks is to buy low and sell high4.

When a stock’s price drops, it becomes cheaper for those who bought the shares earlier to turn around and sell them at a profit.

buy low sell high

#19. Stock Charts Don’t Have To Be Hard

A chart is a graphical representation of how the price of a stock has changed over time.

Charts are useful because they can help people make better decisions about when to buy and sell stocks, as well as which ones might be suitable for investment.

chart

#20. There’s No Such Thing As a Sure Thing

Stock analysts often make predictions about whether a company’s stock will go up or down.

However, there is no such thing as a sure thing when it comes to predicting the future of stocks.

no such thing

#21. There’s No Perfect Metric

There are a number of different metrics analysts use to judge whether or not stocks will be profitable.

However, there is no “perfect” metric that can predict future stock performance with certainty.

there is no perfect metric

#22. Dividends Are Your Most Trusted Friend

Dividends are payments that companies make to their investors.

They’re a way for the company’s profits – and the investor’s investment – to grow at a regular rate, rather than relying on price changes in order to see growth.

dividends

#23. There’s More to Stocks Than Just the Price Tag

One of the most common misconceptions about stocks is that a $100 stock must be more expensive than a $20 stock.

In reality, it’s fairly typical for companies with lower market capitalizations to have higher price-to-earnings ratios5.

stock price

#24. Taxes Can Cut Into Your Profit

Unless you are holding an individual stock that pays qualified dividends,

Or a mutual fund with at least 90% of its investments coming from stocks that pay qualified dividends, taxes will likely take a bite out of your profit.

Taxes and Profit

#25. Assess Your Needs & Goals

It’s important to know what type of stocks you’re buying, and how much the commissions will be.

Some brokers offer commission-free trades for verified accounts or if you deposit a minimum amount into your account each month.

what you need to know

Common Questions

What Are Stocks?

What Factors to Consider When Buying Stock?

Is It Safe to Invest in Stocks?

What Are the Benefits of Being a Stockholder?

Who Can Buy Stocks?

How Are Stock Prices Determined?

In Conclusion

The stock market is a volatile place, but it can be rewarding if you understand the risks and rewards.

Investing in stocks will always have its ups and downs. A long term plan is a good ingredient for success.

Make sure to do your research before diving into investing for the first time. 

References

  • www.altitudews.com.au/14-amazing-facts-about-the-stock-market/
  • www.thepoorswiss.com/stock-market-facts/
  • www.investedwallet.com/stock-market-statistics/
  • www.fool.com/investing/2020/10/10/11-hard-to-believe-stock-market-facts/
  • www.groww.in/blog/interesting-facts-about-the-stock-market/
  • www.investopedia.com/financial-edge/0411/5-essential-things-you-need-to-know-about-every-stock-you-buy.aspx
  • www.forbes.com/sites/steveschaefer/2016/01/05/10-things-you-absolutely-need-to-know-about-stocks/
  • www.familyfinancemom.com/investing-in-stocks-101/
  • www.smartmoneymamas.com/stock-market-101/
  • www.stockstotrade.com/10-questions-beginner-investor/
Share This Article
rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
John Lawson

Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.
francis

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
kath icon

Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.
nicola

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

See How Much You Can Release 👇

Use the QUICK form below.

 

Equity Release Calculator

Value of Your Home?

50000

Drag me

🔒 100% Safe & Fast

As Featured In
yahoofinance marketwatch