How do companies and investors benefit from the stock market?
Answer:
Before the stock exchange, buyers and sellers had to find each other. The NYSE actually started as an open air market. It was an informal setting where people could go to find buyer or sellers.
The market or stock exchange adds liquidity to the system. It makes it easier to turn your stocks into cash. Stock gains on paper aren’t worth much unless you can convert stock shares into cash. The markets facilutate this exchange.
Imagine how inconvenient it would be if there were no grocery stores. You’d have to travel around looking for farmers and ranchers to buy food.
Posted: August 9th, 2010 under US Stock Market.
Tags: Stock market