Do you know Stock Market Advantages???

The stock market works by buyers and sellers (traders) who bid on shares of stocks. These are a small piece of ownership of a public corporation. Stock prices usually reflect investors' opinions of what the company's earnings will be.





Traders who think the company will do well in the future bid the price up, while those who think it will do poorly bid the price down. Sellers try to get as much as possible for each share, hopefully making much more than what they paid for it. Buyers try to get the cheapest price, so they can sell it for a profit later.

Advantages of the Stock Market

Companies sell stocks because it's a good way to get a very large sum of financial capital. However, the company itself must be generating a lot of income to make it worthwhile. Issuing an Initial Public Offering (IPO) is very expensive.

After that, there is no privacy, as investors review the company's profits and strategy every quarter. The other ways of obtaining financing are privately, through personal loans or private investors, or through bonds, which are loans traded publicly.

 The advantage of stocks vs bonds is that stock don't require monthly repayment of interest.

Individuals use the stock market because the returns, on average, outpace those of other investments, such as bonds or commodities.

 Stock market investing is the only really good way to make sure your investments do better than inflation.


source:
http://useconomy.about.com/od/themarkets/f/Stock_Market_Co.htm