IVESTMENT
INSIGHT
Kabo Madigele
I
“The more risk appetite you
have, the better.”
t is seemingly an illusion. However, the
truth is that it is very
much closer to reality than
you may think. You can own a
business without even having
to stress about the routine of
going to work every day and
making the hardest of decisions.
What are stocks?
Stocks are among the most innovative inventions of wealth creation. Therefore, attaining financial autonomy begins with a
concrete comprehension of
stocks and their trading. Stocks
or securities or equities are basically a share in the ownership...
of a company. They denote a
claim on the company’s assets and profits. Once they
are bought, a stock certificate is issued as proof of
ownership, but in this digital
era, they are kept electronically by brokerage firms.
How and where are they
traded?
Stocks are bought and sold in
exchanges. Buyers are sellers
meet here and agree on a
price. Most of them are
physical settings where deals
are carried out on the trading floor. Traders can be
seen wildly yelling and signalling to each other.
On the other hand, the virtual
exchange has a network of
computers which allow for
electronic-based trading.
These markets exist to
smoothen the exchange of
securities, thus alleviating the
risk of investing (financial
loss). There are two main
types of markets; a primary
market where new stocks are
created in the nature of an
IPO, that is for private companies which are to be listed and
made public and a secondary
market, where investors trade
previously issued securities
without involving the companies which initially issued
them (Stock Market.)
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