The truth about world stock investment will surprise you

One of the forms of long-term investment that is recommended for people with little capital is investing in stocks. Therefore, the stock market is one of the most exciting places with a huge amount of transactions every day. Many people are still struggling and looking for profits in the domestic stock market but forget, the international stock market is also extremely potential. Let’s see what’s interesting and surprising about investing in world stocks!

1. The Stock Market is over 400 years old!

Many people think that the stock market is something modern. Most people would say it started about 100 years ago. But in fact, the stock market has been around for a long time.

The stock market is more than 400 years old
The stock market is more than 400 years old

The idea of ​​the stock market was started in the Netherlands in 1602. Dutch East India Co. started issuing paper shares. Shareholders can stock investment this paper. This company is the first concept of stock market. This led to the establishment of the oldest Stock Exchange, the Amsterdam Stock Exchange. Today it is known as the Euronext stock exchange.

2. There are more than 60 stock exchanges in the world

The two largest stock exchanges in the world are the NYSE and the NASDAQ and there are more than 60 stock exchanges in the world. The 3 major stock exchanges after the above 2 names are Asian exchanges, including Japan Exchange Group, Shanghai Stock Exchange & Hong Kong Stock Exchange.

Interestingly, the Swiss Stock Exchange is still 13th on the list, despite being a small country. The smallest stock exchange in the world is the Seychelles Stock Exchange. It has four different stocks and a total market capitalization of around $100 million.

3. The stock market has a 70% chance of going up in any given year

In any given year, the stock market is more likely to go up than to go down. For example, over the past 100 years, the Dow Jones Industrial Average (DJIA) has grown 70% for the year. And over the past 40 years, the Standard & Poor’s 500 (S&P500) index is up 77% year over year. This is a very significant difference. Of course, this is only historical data. But this has been going on for 100 years.

4. October is the month with the most volatility

There is a myth surrounding October in the stock market. There is even an effect called the October Effect.

People think that the stock market fell more in October than in other months. There were two major crashes in October. The great crash of 1929 and the crash of 1987 both took place in October.

But if we take statistics for a long time, this effect is not significant. More bear markets end in October than they begin in October. This data makes it more interesting. And these two incidents are old enough for most people to ignore them. Because of these points, fewer and fewer people believe in the October Effect.

However, according to data, October is the month with the most volatility when investing in stocks. There were more big swings in the stock market in October than in any other month. So you need to be ready for some stock trading in October.

5. September is the worst month

We just found that a lot of people believe in the October Effect. Similarly, September was the worst month for the stock market and investing in stocks.

On average, since 1950, the Dow Jones Industrial Average (DJIA) has fallen 0.8%. And over the same time period, the Standard & Poor’s 500 index fell 0.5%. This drop is significantly less than all other months.

No one knows why this happened. It is possible that some people withdraw cash at the end of the summer, causing some recession. Another possible reason is that some traders are on vacation in August. And when they come back, they exit some of their positions for a profit. This led to some selling pressure and decline. But these are just theories. All in all, the September Effect is just another anomaly.

Now, should you sell everything before September? Of course not! This result is only a multi-year average. It may also change in the future. You should not time the market based on such averages.


6. The United States accounts for 40% of the world stock market

The world stock market is very large, with 60 stock exchanges! But the US stock market is the biggest by far!

As of 2018, the US stock market represents 40% of the entire world stock market! It is much higher than the second country, Japan, which accounts for 7.59% of the world stock market. It’s really impressive that a single country creates so many stock markets.

The five largest national stock exchanges are (as of August 2018):

United States, 40.01%

Japan, 7.59%

China, 7.51%

Hong Kong, 6.51%

Great Britain, 4.49%

7. The origin of the Bear and the Bull comes from California

You may have heard of bears and bulls in the market stock investment. A bear is someone who invests in stocks when the stock market goes down, and someone who invests in stocks when the stock market goes up. But do you know why we use animals like this?

These names come from the fact that a bear is attacking from above in a downward motion. And a bull is attacking from below in an upward direction.

The origin of these terms is not entirely known. But the most plausible story for them comes from fights with animals in California.

They fought bears and bulls in California. These wars are parties for the town on the Sunday after church. They had many events and competitions, such as horseback riding. And finally, the big event is the fight between a Grizzly Bear and a Spanish Bull. In a fight, the bear is usually on the defensive while the bull is the first to attack. These wars may have led to the stock market’s bear-and-bull analogy.

8. The most expensive stock is Berkshire Hataway

We talked about Warren Buffett on this blog. He is considered one of the greatest investors of all time. And he founded Berkshire Hataway. But did you know that shares of Berkshire Hataway are the most expensive in the entire stock market?

Class B shares of Berkshire Hataway (BRK.B)
Class B shares of Berkshire Hataway (BRK.B)

Berkshire Hataway’s Class A (BRK.A) stock is currently worth more than $300,000. It is quite impressive. It was over 10000 USD in 1992. In 2006, it was worth 100000 USD. Its value increased 10 times in 14 years, not too bad! It reached more than 200000 dollars in 2014. And it reached 300000 in 2018.

Interestingly, there are also Class B shares of Berkshire Hataway (BRK.B). These shares do not have any voting rights. But they are much cheaper if you want stock investment into this company.