The Stock Market

What is the stock market?
The stock market is the finding point between the supply and demand of capitals. Supply is carried out by investors whose main objective is to obtain profit from their money. On the other hand, the demand of capitals comes from societies that have personal properties and of credit titles, created with the objective of capturing financing for profitable investment projects. The financing of investments that have a relatively long maturing stage, requires obtaining capitals in the long run through emission of values in the long term such as bonds and debentures. In the same way, the creation or amplification of a company requires of the contribution of capital at a defined term, not demanding, through the emission of stock. Both forms of obtaining of resources have need of the existence of people that save capital and that are willing to put in their capital for a relatively long term. Nonetheless, there are few that are willing to acquire such instruments, if they have not been previously assured the liquidity at convenient prices, in face of eventual need of recovering the contributed money. This liquidity can only be assured by an efficient market, where sellers and buyers concur freely, and where the established prices correspond to a fair balance between supply and demand. The regulation of the market is one of the most important functions that the Stock exchange Superintendence, and has as a fundamental objective to maintain the market in order, avoiding the manipulation of prices and making sure there is full reliability of the system, avoiding irregularities and providing equal opportunities to everyone that desires to participate in it. From the practical point of view, the stock market accomplishes a very useful role, by providing suppliers and buyers of shares a physical meeting place so they can carry out their transactions through the services that the stock brokers provide.