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    The Origin of the Stock Market

    Standing at the value of US $95 trillion globally, the stock market is currently paramount in industry growth. A stock symbolizes an investor’s fractional ownership to a particular company and a stock market refers to an electronic marketplace where investors buy and sell shares publicly together.

    But how did the stock market exchange emerge?

    Although the trading of the prevalence of debt and commodities goes way back to the middle ages, the modern concept of the stock market began only in the 16th century. The stock exchange as we know now was first pioneered by the Dutch East India Company in 1602 resulting in the formation of the Amsterdam Stock Exchange. During this time, many noble merchants looked forward to launching huge businesses, however, a single merchant couldn’t solely raise the substantial amount required for the capital. Consequently, groups of small investors pooled their savings and became co-owners of individual shares in businesses. These businesses resultantly formed joint-stock companies. Joint Stocks, therefore, served as a medium for shareholders to buy, sell and trade with other shareholders conveniently. This financial innovation eventually spread and implemented in other European countries such as France, Spain, and Portugal leading the practice to England where the London Stock Exchange was founded in 1773. In 1792, the stock market found its way in American colonies with the establishment of Wall Street which now conjectures and determines the world economy country by country. After nearly three decades from its establishment, there are sixteen stock exchanges in the world as of today with a market capitalization of over US $1 trillion each and they continue to help revolutionary ideas become a reality.

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