Interest rates are lower than they have been in a long time and therefore money market accounts are paying very little return on investment.
This is causing more and more small investors to turn to stocks and bonds to carry their portfolios.
Many people do not realize that the U.
S.
stock market actually consists of two separate entities, the New York Stock Exchange (NYSE) and the NASDAQ.
These two exchanges have many differences that should be understood before investing in stocks Years ago, the NASDAQ contained mainly small companies.
When the tech market started to boom, overnight the NASDAQ contained some of the largest companies in existence.
The NYSE contains almost all of the oldest mega companies in America such as GE, Major Soft drink Companies and hundreds of others.
In terms of the companies they contain, they are these days very similar, but there are still some striking differences.
NYSE Though it has become computerized over the years, the NYSE still uses floor traders to conduct transactions, just like they have done since the beginning.
Each stock is assigned a specialist that administers that stock.
To make a purchase, you must send your request to a floor broker who will then try to make the purchase at the price you are offering.
The NASDAQ, owing to its high tech emphasis, is entirely computerized.
Though the NASDAQ does of course have a physical location, there is no trading floor.
The NASDAQ is referred to as over the counter trading.
In other words, there is no broker necessary to make a purchase.
Buyers and sellers are directly connected via the NASDAQ network.
Though brokers are still used to make purchases, each is connected to all the others and do not need to deal with individual stock specialists.
This tends to keep trading costs lower and spawned the advent of day traders and zero commission trades.
This is causing more and more small investors to turn to stocks and bonds to carry their portfolios.
Many people do not realize that the U.
S.
stock market actually consists of two separate entities, the New York Stock Exchange (NYSE) and the NASDAQ.
These two exchanges have many differences that should be understood before investing in stocks Years ago, the NASDAQ contained mainly small companies.
When the tech market started to boom, overnight the NASDAQ contained some of the largest companies in existence.
The NYSE contains almost all of the oldest mega companies in America such as GE, Major Soft drink Companies and hundreds of others.
In terms of the companies they contain, they are these days very similar, but there are still some striking differences.
NYSE Though it has become computerized over the years, the NYSE still uses floor traders to conduct transactions, just like they have done since the beginning.
Each stock is assigned a specialist that administers that stock.
To make a purchase, you must send your request to a floor broker who will then try to make the purchase at the price you are offering.
The NASDAQ, owing to its high tech emphasis, is entirely computerized.
Though the NASDAQ does of course have a physical location, there is no trading floor.
The NASDAQ is referred to as over the counter trading.
In other words, there is no broker necessary to make a purchase.
Buyers and sellers are directly connected via the NASDAQ network.
Though brokers are still used to make purchases, each is connected to all the others and do not need to deal with individual stock specialists.
This tends to keep trading costs lower and spawned the advent of day traders and zero commission trades.
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