Benefited by innovation information technology meliorate after 1980s, everybody can sit at home and press a click easily receive vary information what people wants. Save time, money, communication and the importantly is without delay. Look back previously when peoples rarely got information from newspaper, their insight just be updated by daily or even weekly. If there are any significant financial information happened or will be publish later, they probably as an ignorance guys. Totally no ideas anything take place on outside world. Fortunately, in modern times, investors can keep trading via computer. That’s pretty leap forward for individual investors, they can monitor worldwide stock market round the clock like a watchman, moreover, not necessary pay exorbitant agency fee under stockbroker.
Almost of every entrepreneur also has a dream that have capacity to build up own success business and opportunity for further growth. Stock market provide excellent platform to collect capital as well as improve the standing of the concern and its products. What an ideal place for them. In early February, Mark Zuckerberg who Facebook CEO cannot resist the allure of advantage. Disclosed that seek for a raise £3.16bn by initial public offering (IPO). Facebook, world's largest social networking site just used eight years to reach top four in internet giant.
All epic win contribution by Mark Zuckerberg, so that no one will judge his decision. And he Mark Zuckerberg said that continuing to run the company for users, for employees, not for shareholders and so on. In retrospect, online games maker Zynga sell shares to their public in December 2011. But find out result is immediately chopped down below its asking price on the first day of trading. Seems like online firms listed shares to stock markets is a doing something venturesome. But the lucky ones who can become instant multi-millionaires and still able to hold on to the businesses they started as well as to run them into much ways as before. Facebook flotation plans are an investment plan or just a gambling game?
Nowadays, our brilliant economy world all depends upon stock market which a good and well-run exchange system channels our money into. Market share price is response sensitively, once relevant information publishes will attract every investor make a sell out or buy back decision. As above I take about, fast information transmission age let economists find a theory named as Efficient Capital Market Hypothesis(ECMH) which idea that the stock market is informationally efficient and that this leads to allocative efficiency is probably an old on.
At 10 February 2012, Barclays, the UK's fourth largest bank by market value has reported a 3% fall in profits to £5.9bn for last year. The Chief executive Bob Diamond, clam that losses on bad loans fell by a third from 2010 to £3.8bn. The adjusted return on equity was 6.6% for the year, down from 6.8% in 2010 and well below its target of 13%, furthermore, The average bonus payout for a Barclays' employee fell 21% year-on-year to £15,200 shown that Barclays Bank was really not so satisfactorily to anybody. We can clearly see that the price fell down from 23.37 to 23.23 prior to exchange market open. This is typically the semi-strong form that share prices adjust immediately and for new information as publicly available. Few second reflect all publicly available information on price, no one can consistently over perform the stock market and earn abnormal returns. Invariably, this evidence was a textbook example, we can see that over 10 thousands transfer volume at 9 February before close market. Someone recognize the existence of inside information and that those in possession of it can outperform the stock market. But, most of investor cannot make any abnormal return and interpreted as the key change in the share price of market caused by this bad news.
As a small individual investor, the only can do is trust the mechanism underpinned by government and stock exchange group. To control ECMH that for balancing market equilibrium. Bear in mind, odds of winning of £1m from an initial £1 bet is only 1 in 2m (info. from British Columbia Lottery Corporation’s website www.bclc.com). As finance studied students, all we know that investment must be take some risk unpreventable, short term investment is more like speculation, not suitable for anyone cannot bear risk; but a long term investment probably can earn dividends also can though price rise to against market inflation. My point of view to answer the question is do research before invest, use our expertise as we learnt to seek out the portfolio return rate over than average. I think this can get much chance than a gamble.
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