![](https://images.ctfassets.net/q33z48p65a6w/18tFTgZecilp0tPPBgIabs/ec4d266421ad53e8d65a3f23cae432a2/CRST-3503_Equities_Blog_Header_Assets_1940x1280_what_is_stock_market.png?fit=thumb&fm=png&q=80&w=260)
Navigating the stock market: How does it really work?
Before any investor buys or sells stocks, they need to understand how the stock market works. Not only that, but it's also important to find out how the whole stock system operates, including exchanges and market dynamics. Interested in stocks but not sure how it all functions? This article delves into the fundamental workings of the stock market, with insights and strategies to empower investors in developing their investment portfolios.
What are stock markets?
Start banking online
Open your dream bank account in minutes — right from your smartphone. No paperwork needed!
Get your N26 bank account![Start banking online.](https://images.ctfassets.net/q33z48p65a6w/4TRxzfpu0eLJm3sPIyCJPC/022cc9321a8cb0456fa133d522bc10d1/2311_Conversion_Card_Assets_Open_bank_account_online_470x470.png?fit=thumb&fm=png&q=80&w=360)
Why is the stock market important?
How does the stock market work?
What are the most important stock markets?
- New York Stock Exchange (NYSE): As one of the largest and oldest stock exchanges globally, the NYSE is home to many of the world's leading companies. It's known for its strict listing requirements and high volume of trades.
- NASDAQ: Renowned for its technology-focused listings, NASDAQ is an electronic exchange that hosts tech companies like Apple, Microsoft, and Amazon. It's recognized for its innovation and attracts growth-oriented companies.
- Tokyo Stock Exchange (TSE): The largest stock exchange in Japan, the TSE is a key player in the Asian markets. It hosts major Japanese corporations and is influential for the region's economy.
- London Stock Exchange (LSE): The LSE is one of the oldest exchanges globally and is a hub for international trading, particularly in European markets. It's known for its diverse listings and global reach.
- Shanghai Stock Exchange (SSE): As China's primary stock exchange, the SSE plays a vital role in the country's economy and is a key indicator of trends in the Chinese market.
- Hong Kong Stock Exchange (HKEX): Known for its strategic location bridging East and West, HKEX is a major international exchange, especially for companies wanting exposure to China and Asia-Pacific markets.
What type of products can you invest in the stock market?
- Fixed income: These investments, such as bonds, offer a predetermined fixed return over a specified period. They provide a predictable income and are considered lower risk.
- Variable income: Stocks and equity-based investments have varying returns based on their performance on the market. While they have the potential for higher returns, there's also higher volatility and market risk.
- Investment funds: These funds, such as mutual funds or exchange-traded funds (ETFs), are diversified and professionally managed. They give investors access to various markets or sectors.
- Hybrid products: Combining elements of both stocks and bonds, hybrid products aim to balance risk and return. They can be convertible bonds or preferred stocks, for example, offering characteristics of both instruments.
Banking basics
Banking jargon can be confusing—but it doesn't have to be. Find simple explanations to popular banking terms.
Learn the basics![Banking basics.](https://images.ctfassets.net/q33z48p65a6w/7eB2GsuightOChbLuj3UTO/bb06a3c2d6c05efe7cf57a5ebf49f367/2310_Conversion_Cards_Banking_basics_470x470_1.png?fit=thumb&fm=png&q=80&w=360)
Your money at N26
FAQ
- What is stock market trading?
- What are the differences between the stock market and stock indexes?
Find similar stories
Related Post
These might also interest youYour guide to passive income
What is passive income, and how can it help you maximize your money over the long term? We explore this and more here.
The myth of starting early: Why it’s never too late to start investing
Are your finances doomed if you don’t start setting money aside early? We explain why investing early is more difficult than it seems, and what you can do to grow your money at any age or stage.
Trading vs. Investing: Understanding the Key Differences
Trading and investing — what’s the difference? And what might be best for you? Brendan Walsh, a veteran investor, digs into the details and gives his expert opinion.