Introduction
The NASDAQ is the second-largest stock exchange by market capitalization, behind only the New York Stock Exchange (NYSE). Established in 1971 as the world’s first electronic stock market, it’s located near Times Square in Manhattan City and known for being a technology-focused exchange home to some of the world’s most innovative and successful companies. In this post we’ll take an in-depth look at what makes the NASDAQ unique, its history, how it functions and what investors should know about investing on it. Additionally, we’ll look at some top companies listed on it and what you should know as an investor when considering investing here.
History of NASDAQ
In 1971, the NASDAQ became the world’s first electronic stock market. Before this innovation, stock trading was done on a physical trading floor where brokers would come together physically to buy and sell shares. The NASDAQ revolutionized this process by using computers for processing orders faster and more efficiently.
At first, the NASDAQ was home to mostly smaller technology-oriented businesses that weren’t listed on larger exchanges like the NYSE. Over time however, more and more large corporations began listing on the NASDAQ, eventually becoming home to some of the world’s biggest names like Apple, Amazon and Alphabet – parent company of Google.
How NASDAQ Works
The NASDAQ is a stock exchange where buyers and sellers come together to trade shares of publicly traded companies. What sets the NASDAQ apart, however, is that it operates electronically – all trading takes place through computer networks rather than on physical trading floors.
Investors typically utilize a broker to buy or sell shares on the NASDAQ. Brokers connect directly to the exchange’s computer network in order to place orders, and the exchange matches buyers and sellers based on price and quantity.
The NASDAQ is open for trading Monday through Friday from 9:30 am to 4:00 pm Eastern Time. Here, investors can buy and sell shares in real-time as prices fluctuate based on supply and demand.
Top Companies on NASDAQ
The NASDAQ is home to some of the world’s most successful and innovative businesses. Here is a list of some of the top listed companies trading on this exchange:
Apple (AAPL) is the most valuable firm in the world, with a market capitalisation of more than $2 trillion.
Microsoft (MSFT) is another IT giant with an estimated market capitalization of almost $1.8 trillion.
Amazon (AMZN) is an e-commerce behemoth believed to be valued over $1.5 trillion.
Alphabet (GOOGL) is the parent corporation of Google, with a market worth of over $1.4 trillion.
The social media behemoth Facebook (FB) is valued at an astonishing $800 billion.
As can be seen, the NASDAQ is home to some of the largest and most valuable corporations in the world. For investors, this presents an unbeatable chance to invest in companies with strong growth potentials and proven success stories.
What You Should Be Aware as an Investor
If you’re considering investing in the NASDAQ, there are a few things to consider. Most importantly, remember that investing in the stock market involves risks and could ultimately result in loss of funds.
Additionally, the NASDAQ is known to be more volatile than the NYSE in terms of price volatility; this could present investors with both risks and opportunities depending on their investment objectives and tolerance level.
Finally, it is crucial to do your due diligence before investing in any company. Although the NASDAQ boasts many successful businesses, there still exist risks associated with investing in individual firms. Factors such as competition, changes to management and broader economic trends can all have an effect on a company’s stock price; thus, conducting extensive research before investing is highly recommended.
One way to minimize risk is by diversifying your portfolio. By investing in a variety of companies across different sectors and industries, you can spread out your risks and potentially earn higher returns over the long-term.
Another key consideration for investors is fees. When trading stocks on the NASDAQ, you typically have to pay a fee to your broker. It’s essential that you comprehend these charges and how they may impact your returns in the long run. Furthermore, some brokers may charge additional costs such as account maintenance; thus, reading all details thoroughly and fully comprehending all costs involved with investing should always be taken into account.
Conclusion
The NASDAQ is a globally-recognized stock exchange that has been at the forefront of technological innovation since 1971. As home to some of the world’s most valuable and successful companies, it presents an attractive investment option for investors seeking high growth potential.
However, investing in the NASDAQ carries risks, so it’s essential that you do your due diligence and research potential downsides before investing. By diversifying your portfolio, being aware of fees, and staying abreast of market movements, you can position yourself for long-term success as a NASDAQ investor.
