About Stock Market Careers
Modern stock markets have been in existence for over 300 years, helping hundreds of nations become profitable and millions of people around the world achieve great wealth. A career in the stock market can be challenging, rewarding and, depending on the nature of the job risky. Intelligence, mental quickness, discipline and a willingness to learn are vital for anyone seeking a career in the stock market.
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History
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Modern stock markets date back to the early 17th century, with the founding of the Amsterdam Stock Exchange. The London Stock Exchange was founded almost a hundred years later, and the New York Stock Exchange almost a hundred years after it. Early stock market jobs mainly involved brokers who matched buyers and sellers, independent dealers and exchange officials who worked to ensure the smooth operation of markets. Contemporary stock markets offer most of the same types of jobs, different only in form and sophistication, but not function.
Significance
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The stock market is one of the most important components of the global economy, and almost every developed country has an exchange. Modern equity markets allow investors of all sizes to invest in shares offered by countries around the world, often at the click of a mouse. This ensures round-the-clock global liquidity for investors and corporations, enabling them to fund operations and expand without exclusively depending on large private equity investors, the bond market or lenders.
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Function
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Stock markets function as a meeting place for companies seeking access to capital and investors looking for a place to achieve risk-controlled returns with their money. Participants in the stock market, from fund managers, to broker/dealers, to independent traders, and market makers, ensure that the increasingly computerized global stock market remains liquid and efficiently functioning 24/7.
Types
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There are many types of stock market careers. One of the most basic careers is that of an independent stock trader, for which you only need to have a brokerage account, Internet connection and trading software to get started. Another career is that of a stock broker, for which you'll need to pass the SEC-sanctioned Series 7 test, sponsored by an established and licensed stock brokerage. Further up the monetary chain are investment bankers, who underwrite the stock issue of new companies, called initial public offerings (IPOs), and institutional money managers who seek to achieve optimum risk adjusted returns for their investors.
Features
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The features of stock market careers vary from job to job. If you trade for yourself, or form a money management business such as a hedge fund or Commodity Trading Advisor, you stand to make large, possibly unlimited returns, but your risk is quite high. If you have one or more bad years, investors will likely withdraw their money from you, and it might be difficult to find new sources of capital. The job of a stock broker is less rewarding, but potentially more secure since employment and income are not dependent on correctly investing in the stock market.
Potential
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Careers in the stock market offer the potential for everything from stable, white-collar employment to multimillion dollar wealth accumulation in a short period of time. Potential varies with how rapidly you can advance yourself in a career and how quickly you can make gains with your own trading. The more risk you take, the greater your potential, but also the higher the chance you'll suffer a crippling blow to your account.
Warning
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While often serving as a vehicle to great wealth, the stock market does occasionally suffer severe corrections and even crashes. Being financially exposed to one of these crashes can result in massive losses or diminished employment prospects in the financial industry. Therefore it's imperative to avoid greed and control your risk when trading your own capital and equally important to know what you'll do for a living if the financial industry experiences a downturn.
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