Capital market
The financial system in Brazil is composed of institutions responsible for raising financial resources, for the distribution and circulation of values and for the regulation of this process. Directly linked to this body are the Central Bank of Brazil, which acts as the executive body and the CVM (securities commission), which is responsible for regulating and promoting the securities market (both stock exchange and over-the-counter) .
At first we must consider the difference between an investor and a speculator, it is not a qualitative difference but a quantitative one, it is not a question of stating that one is ethically better than the other. application horizon and the way they seek their earnings.
Investors have long operating terms, measured in years, buy shares on the stock exchange with the intention of staying with them for a long time, their earnings and income basically come from the dividends provided by the share.
The choice of share is made based on the cash-yield indicator, which considers the ratio of the annualized dividend to the market price of the share, monitoring is also done by the same indicator. Using the cash yield, it is understood why , for the investor, the fall of the market can be something desirable, and it is possible that, many times, investors cause sharp falls in the stock exchanges, generating considerable losses for speculators, the investor should be guided by the dividend of share and not by the share price on the stock exchange.
Speculators have short terms of action, measured in days or weeks: they buy a share with the intention of quickly undoing it, taking advantage of its possible appreciation in the price. stock price on the stock exchange.
The speculator is guided by the share price and not by dividends, a sharp fall in the stock market usually tends to cause him great losses.
Knowledge about the capital market is useful both for speculators, investors with a short horizon, guided by the variation of stock prices on the stock exchange, and for investors, a person, in fact, can adopt these two positions: manage part of their funds available as an investor and the other part as a speculator. It is obvious that the speculator posture brings greater risk, but generally provides a greater return.
HOW THE MARKET WORKS
It is not possible to trade shares without mastering a minimum set of concepts that are addressed in all areas of the market, which in some ways is very broad, such concepts are fundamental for understanding the market as a whole and for understanding how investors act.
Initially, it is discussed how the market works, that is, what gives rise to stock trading. It should be clearly understood that it is the primary market, in which the company sells its shares to investors, and the secondary market in which investors operate .The stock exchange assists the process of buying and selling shares among investors, which corresponds to the secondary market, but it is also an important instrument for companies to raise funds by selling shares to new or existing shareholders.
Once this is understood, it will be possible to see that a large part of investors buys and sells stocks supported by some techniques, which help to select and follow stocks. Such techniques, due to their characteristics, are divided into two large chains or schools. ,will operate based on intuition, on the advice of friends, on newspaper readings, on rumors or on any other source. This practice does not usually make the investor's capital increase so it is necessary to be very careful when investing in shares.