The stock market is one of the most exciting and intriguing parts of the global economy. It has a significant impact on everyday lives, yet it’s still extremely misunderstood by many people. Here are the 15 facts about the stock market that are guaranteed to fascinate you.
Fact #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.”
Fact #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.
Fact #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.
Fact #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.
Fact #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.
Fact #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.
Fact #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 one of the first people to put together an investment guide.
Fact #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.
Fact #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.
Fact #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.
Fact #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.
Fact #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.
Fact #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.
Fact #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.
Fact #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.
What Is the Stock Market?
The stock market refers to a collection of markets for trading stocks. A single exchange may have shares in only one company or have thousands of companies in dozens of countries.
What Is a Stock?
A stock is a share of ownership in an enterprise. The owner of the shares has the right to vote on some issues related to how the company operates and to earn dividends from its investment.
Who Can Buy Stocks?
Anyone with enough money to do so. There are no restrictions on who can buy stocks. Still, the minimum purchase is usually set, and these types of transactions must happen through a broker or other intermediary.
How Are Stock Prices Determined?
Stock prices go up and down based on supply and demand. When the demand for a particular stock outweighs available supplies, its price will rise. The opposite is also true: when there are more sellers than buyers, stocks fall in value.
There are many reasons the stock market might fluctuate, but it’s important to remember that this is all part of a more extensive system. As we’ve shown you, stocks have been through much worse and still come out on top in the end.
The same will happen with your investments – they’ll go up and then down again as long as you stay invested for enough time.
Don’t forget what Benjamin Franklin said about patience being key to success!