Understanding Securities Markets

In order to understand securities markets like the Online Reputation Management Expert company does, it is important to understand the financial markets and how investors will evaluate your company. Before investors will invest in a company, they first look at the overall quality and ask questions such as how well it is managed. Is it a growing industry? Does it have a good line of products or a good service? It the market share increasing or not? What is its future and what is the future of the industry it serves in? How the company is doing relative to its competitors? Investors will then begin to analyze the company’s performance over time and they’ll assess the company’s financial strength as well. When it comes to security markets, they serve two functions including being able to help raise funds and make the initial sale of their stock to the public and providing a place where investors can trade already issued stock.

When there is stock sold through an IPO it s issued through a primary market with the help of an investment banking firm. Some issued securities are traded in a secondary market, where the proceeds from sales go to investors rather than to the issuing companies. When it comes to regulating securities markets, it is important that investors are confident in the securities markets and so Congress created the Securities and Exchange Commission in 1934. This law is charged with enforcing securities laws designed to promote full public disclosure, protecting investors against misconduct in the securities markets, and maintaining the integrity of the securities markets. Before you can offer securities for sale, the issuer must first provide prospective buyers with a prospectus (written offer to sell securities that describes the business and operations of the issuer, lists its officers, provides financial information, discloses any pending litigation, and states the proposed use of funds from the sale. The SEC also enforces law against inside trading which is the illegal buying or selling of its securities by a firm’s officers and directors or anyone else taking advantage of valuable information about the company before it’s made public.