Since the time there has been cash on earth, there always have been people who wanted to invest it. And it was safe until corporations came it to existence and introduced stock market. Thousands earned, millions lost, and millions earned again.

Today, millions of people all around the world from Tokyo to New York and from Paris to London, buy and sell shares worth trillions every day. A share price of a company can determine it’s financial condition and it’s future plans like will it be merged, taken over, blossom, or just wind up. Hence, along with deciding the fate of the company, the stock market has the potential to destroy or make someone rich overnight.

This phenomena, though sounds similar, is not a casino. Money invested in a stock of a company contributes to the capital of the company, and ultimately affects the economy. Most often, a budding stock market is a sign of a growing, rapid-pace economy. And this has been true since the establishment of very first joint stock company on earth.

And it will always be the truth as most of the money raised by public companies to initiate its operations is borrowed from the investors. These shareholders, later, receive the right to sell their stake to anybody they wish as they are partial owner of the company now.

Till the time an investor holds the stock, he is entitled, as a partial owner, to receive the company’s profit limited to the percentage of his holdings. This profit distribution by the company after deducting its operation cost and other expenses is known as dividend. Similarly, when a company winds up, shareholders are the last to receive compensation.

Stock traded in the market is largely owned by individuals in forms of household portfolios, pension funds, insurance, and other institutional investments held by banks, fund managers, and other financial institutions. So, a minor change in the market affects a majority of people in the country.

This may sound a bit risky unless you learn about hedge funds, where the buyer purchases the stocks and short sells it too. This means he can bet on the value dropping as well. Similarly, many private equity funds buy major part of the stock of the companies struggling to survive.

Hence, more than fundamentals, it’s now very difficult to track the source that’s moving the market, and ultimately, affecting every individual of the country.