Welcome to the Jungle - Your Introduction to Capital Markets

Get ready to step into the fascinating world of financial markets, often referred to as the trading 'jungle'. This chapter will introduce you to what capital markets are, why they exist, and working.

Welcome to the world of financial markets, also known as the trading 'jungle.' This fascinating world is a meeting place where people who want to invest their money meet businesses and governments that need money.

The financial markets, or capital markets, are platforms where people buy and sell financial products like stocks and bonds. Think of it like a marketplace, but people buy and sell financial products instead of buying fruits or clothes.

But why do we need these markets? Capital markets serve a very important purpose. They are like bridges connecting people with money to invest and businesses needing money to grow. When businesses need money, they can sell a part of their company, known as stocks, or borrow money from investors by issuing bonds. Investors buy these stocks and bonds to earn money from their investments.

In the world of capital markets, there are two places where these financial products are sold. The first is the primary market. This is where companies and governments issue and sell new stocks and bonds for the first time. Once these stocks and bonds are sold, they can be traded among investors in the secondary market.

Who are the people who participate in these markets? There are individual investors like you and me who might buy stocks or bonds as a way to invest money. There are also big institutions like mutual funds and pension funds, which manage money for a large group of people. And then, some businesses and governments issue stocks and bonds to raise money.

Capital markets play a very important role in our economy. They help businesses grow by providing them with the money they need. This can lead to new jobs and new products or services. They also help investors grow their money, providing greater financial security and wealth.

In the next few chapters, we will dive deeper into these concepts. But for now, remember this - capital markets are like a jungle, filled with opportunities for growth and prosperity. All you need is the right knowledge and skills to navigate this jungle. And that's exactly what this course will help you do.