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Friday, September 10, 2010
 


What are the financial markets?

Financial markets are MARKETS, believe it or not many people forget that. They are places where they are marketed, i.e. are bought and sold assets of different types.
This marketing is based on on the same that capitalism is based on, supply and demand, the more people demand an asset, the asset rises in price and instead the more people offer an asset, the asset price falls. Does this happen in your business?, More competition and fewer buyers will have to adjust prices downward. To less competition there are more buyers, since nobody is low price and even the rise.
And what is the purpose of this asset marketing?
MAKING MONEY of course in financial markets the only way to make money is to ANTICIPATE PRICE MOVEMENTS, buying before prices rise, sell before the price drop. This is SPECULATION, through a careful analysis we can SPECULATE that an asset will rise in price and bought it hoping to rise in price, but also it could be wrong and the price will drop. It's called RISK.
                   
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