What Is The Market?

I guess in terms of helping my beginning investors, I thought it might be helpful to discuss what the market is when we are talking about stock market investing. A market is a big network, of securities dealers, brokers, traders and investors, and speculators who are actively trading with each other. Today the markets are highly computerized and even though there are live brokers, the vast majority of investors are hooked into it via the internet.

The stock market in the United States, as the free market capital of the world, is probably the prototype for other financial markets and my guess is that it's also the largest. Today, investing in the stock market as far as market value is in the trillions of dollars. The amount of wealth that is gained in the market over time is almost unfathomable to the average investor. The numbers are mind boggling.

Being a successful investor in the market, is about staying abreast of market news. Anything that happens on Wall Street, the New York Stock Exchange, on the Dow Jones, Industrials or the NASDAQ is almost instantly known. By the time you read it, it's old news. For that reason and because of the internet, trading in the market is highly efficient. We know the market price of stocks at any given moment and can buy or sell in a second as trades are executed immediately.

I'm really excited about what the future holds, because we are increasingly finding ourselves in a global market. This dynamic includes other countries, other economies, other currencies and the cultures that they bring. As such, most investors are seeking the very best market intelligence they can find through the publications they use as their trusted sources of information. The China market holds a lot of potential as they increasingly make their market more efficient and more capitalistic. Who knows what is in store as these growing markets start to expand and improve the wealth of their populations.

But the simple fact of the matter is that even though the world markets are extremely complex, the basic law of the free market is still the law of supply and demand. Market price is still whatever the market will bear. That depends on the demand for a stock on the exchange it is listed. A stock in high demand will command a higher price and a stock in low demand will fall in price.

The concept of the market place is also simple because it's still where buyers and sellers meet to trade -- no matter whether it's in person or not.