The Financial Market is the place where people trade in financial securities and derivatives. These include stocks, bonds, raw materials and precious metals. They are also known as commodities. The purpose of the Financial Market is to provide a means for people to make money. It is a worldwide, multi-billion dollar industry.
The Financial Market is the main source of funds for many companies and governments. They function as a conduit between investors and financial institutions, providing a variety of services. This allows individual and business people to make investments and enhance the debt and equity markets. In addition, a secondary market exists for investors to purchase bonds from companies and governments. These bonds are issued to secure the repayment of money, and the companies must pay the principal and interest on time to satisfy investors.
While the Financial Market is essential for the economy, there are certain risks to be aware of. Too much regulation can slow the process, and too many rules can prevent certain businesses from entering the market. Certain investments can cause investors to lose their money. Companies may also shift from being profit-driven to being investor-driven, and the Board of Directors of these companies must make decisions in a way that is beneficial for all stakeholders.
The Financial Market works differently in different parts of the world. Some markets are regulated and others are completely unregulated. The prices of different assets fluctuate, and investors can use this information to their advantage. While traditional markets were based on people being physically present, many financial markets today lack that aspect of human interaction. Nowadays, price quotes are displayed on a network of computer screens.