Why is stock exchange important for an investor?
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Importance of stock exchange from the viewpoint of investors:
1. Dissemination of useful information: Stock exchange publishes useful information regarding price lists, quotations, etc., of securities through newspapers and journals. The interested persons buy and sell their securities on the basis of information provided by the stock exchanges.
2. Ready market: Persons desirous of converting their shares into cash may easily do so through a member of stock exchange.
3. Investors’ interests protected:Stock exchanges formulate rules and regulations so that members may not exploit the investors.
4. Genuine guidance about the securities listed: The investors can safely depend upon the information provided by the stock exchanges.
5. Barriers of distance removed: Stock exchange removes the barriers of distance with regard to securities listed there. Without stock exchange the securities of a Delhi company may have a limited market in Delhi only.
6. Knowledge of profit or loss on investments: The investors can estimate the profit or loss on the total amount of investments in securities, by comparing the original amount invested and the price of securities on a particular day.