A stock market is a marketplace where buyers and sellers meet to trade i.e. buy or sell the stocks or shares of publicly listed companies. The stock market is the most important component of the free market economy. Equity class has given best returns in the past on long terms than other investment classes like real estate, gold, etc. The stock market is the best place to invest money and get adequate inflation-adjusted returns. But the stock market is a very strange place having high volatility and a long history. Here we are going to discuss 18 stock market facts that will fascinate you and some of them will surely surprise you.
1. The World’s Stock Market has More Than 400 Years Old History.
Most people think the stock market is new but the truth is that the stock market is ancient. Many believe the world’s first stock market system was in the city called Antwerp of the Netherlands in 1531.
Brokers and moneylenders would meet in a commercial center that was home to the influential Van der Beurze family and deal with promissory notes and bonds.
As a result, the first stock markets were called Beurzen. In 1602 The Dutch East India Company was the first company to issue bonds and stock to the general public via Amsterdam Stock Exchange and allow outside investors to buy shares or stocks.
The First Stock exchange in the United state began in New York City in 1792 just after the two-year establishment of the Philadelphia Stock Exchange.
2. New York Stock Exchange was Known as New York Stock & Exchange Board.
The New York Stock Exchange (NYSE) is the most famous and biggest stock market in the world. Among us, Very few know that for more than 70 years it had another name.
In 1972 A group of 24 investors signed the “famous buttonwood agreement” under the buttonwood tree on Wall Street and start the New York Stock & Exchange board. Sometimes it was also known as the “Big Board”.
But in 1863, its name changed from New York Stock & Exchange Board to the New York Stock Exchange (NYSE).
3. The First Investing Book.
Whenever we start our investing journey, we should read a lot of books on inventing to sharpen our investing skills. In today’s World, there are many authors who have written the best books on investing like Peter Lynch, Benjamin Graham, Warren Buffett, Philp A Phisher, and many more.
But do you know who wrote the first book on investing? It was ‘confusion of confusion’ written by Joseph Penso de la Vega in 1688. This book is famous for its four rules of speculation.
- Never advise anyone to buy or sell shares, or never listen to advice for stock picking
- Accept both your profits and your regrets. When you speculate, you will lose some money, and you need to be prepared.
- Profit in the stock market is a goblin treasure. Sometimes profit is very high. Sometimes it is very low.
- He who wishes to become rich must have money and patience.
4. The First Stock Market Bubble.
The first stock market bubble occurred in 1720 and is known as the ‘South Sea Bubble’. The South Sea Company was quite a successful trading company in the United Kingdom.
In the 1720s said the company took over government debt but inflate its stock prices by running a promotional campaign.
By the summer of 1720, its and other companies’ share became overvalued and after the end of August, 1720s top people started selling their shares to book profit and massive sales lead rapid decline in the price of South Sea company’s shares. All this ended with several failures and bankruptcies
5. The Australian Stock Market is The Best Performer From 1900 to 2009.
You may be surprised to know this stock market fact that from 1900 to 2009 the Australian stock market posted the highest inflation-adjusted return per year i.e. 7.5% among the world’s 19 major stock markets.
whereas in the same span, the US stock exchange generated a 6.2% return. This stock market is also placed at the lowest second in the volatility index for the same period.
6. The Compound Rate of Gold was More Than 35% Per Year from 1970 to January 1980.
This is true that gold has generated compounded returns at the rate of more than 35% per year. the total return on gold is more than 1900% from 1970 to January 1980 throughout today. This fact is funny but true.
7. Relation of U.S. Hydrogen Bomb With Stock Market.
Yeh ! this is the coolest fact about the stock market. In the 1950’s United State was developing a Hydrogen Bomb which is also known as a thermonuclear bomb.
A lot of people were curious to know which fuel was used in the hydrogen bomb as Physicists were forbidden to reveal it.
Only one person i.e. ‘Armen Alchian’ a professor of economics found success with the help of the Stock Market and He discovered that they have used lithium as fuel.
He observed that during the test of Bomb the stock prices of ‘Lithium corp’ rose exponentially and make a return of 461% during the primary phase of the experiment. But he was forbidden to publish his finding by the U.S. Government.
8. NYSE Hold The Largest Market Capitalization in The World.
There are more than 60 stock exchanges that exist in word wide. But NYSE holds the biggest market capitalization and represents 40% of the entire stock market. In April 2020, the NYSE had a market capitalization of $25 trillion, which was nearly one-third of the global market capitalization across all exchanges.
It is really impressive that a single country makes so much of the stock market. The list of the Five biggest stock markets as of 2022 is given below.
- NYSE (New York Stock Exchange) holds a Market Cap of $28.19 Trillion.
- Nasdaq Stock Exchange holds a Market Cap of $12.98 Trillion.
- JPX (Japan Exchange Group) holds a Market Cap of $5.37 Trillion.
- SSE (Shanghai Stock Exchange) holds a Market Cap of $ 4.92 Trillion.
- Hong Kong Exchanges holds a Market Cap of $ 4.48 Trillion.
9. Fact About The Bear and Bull Analogy.
If you know about the share market then you must have heard about Bull and Bear in the share market.
Do you know, the bull and bear analogy is the gift of America (California). These bull and bear terms came from the animal fight in California.
These names come from the fact that a bear is attacking from the top in a downward motion. And a bull is attacking from below in an upward motion.
So in the stock market Bull is somebody who bets on the stock market going up and A bear is who bets on the stock market going down.
10. S&P 500 Index Doesn’t Have 500 Stocks
It is also an interesting Stock Market Fact that S&P 500 Index doesn’t have 500 stocks whereas It is an index that has 505 stocks.
Interestingly, the index has 500 companies, but some companies have issued multiple share classes increasing the number of stocks in the S&P 500. This is an important unknown fact about the US stock market.
11. The Most Expensive Stock in The World Belongs to a US Company.
Most investors are aware of the name “Warren Buffett” who have a very good reputation in investing market. He is a legendary investment wizard from the USA.
You may not be surprised to know that the most expensive stock in the world belongs to his company i.e. “Berkshire Hathaway”. As of 2022, the share is selling at more than $450,000 per share.
12. More Than 80% of The Stock Market is Automated.
It is also another stock market fact revealed by CNBC in its report that currently, more than 80% of the stock market is automated. At present, world machines are taking up a bigger share of investing.
60% of equity assets are managed by passive investing instruments such as Index Funds and exchange-traded funds. According to J.P. Morgan, actively managed funds lost around 90$ billion in wealth in 2019, whereas passive funds are able to get $ 39 billion of inflow in the same year.
by 2017 “Robo Advisors” was managing more than $200 billion in assets. As per the research report of S&P Dow Jones Indices in 2016, over one year, 60%+ of active fund managers failed to beat the market index. And Over three years, 92+% of fund managers failed to beat the market index
13. 84% of The Stock Market Wealth is Owned by Only 10% of Americans.
This is a shocking share market fact that 84% of the Stock market wealth in the U.S. is owned by only 10% of Americans revealed by the National Bureau of Economic Research (NBER)
14. There are 13 Stock Exchanges Running in The US.
You will be surprised to know that Americal is currently running not only one or two but 13 stock exchanges. Currently, there are 13 stock exchanges in the US.
Of these, the Intercontinental Exchange Inc NYSE, Nasdaq Inc., and CBOE Global Markets run 12 exchanges, and the IEX Group runs the only independent exchange in the country. These are
- New York Stock Exchange
- NASDAQ Global Select
- NYSE American
- NYSE Arca
- NYSE Chicago
- CBOE BATS BYX
- CBOE EDGX Exchange
- CBOE BATS BZX
- CBOE EDGA Exchange
- NYSE National
- NASDAQ OMX BX
- NASDAQ OMX PSX
15. The October Effect.
There is a perception that exists in the stock market that in October month stock follows a declining trend and also known as the October effect. There were two big crashes in October.
The Great Crash of 1929 and the Crash of 1987 were both in October. Although It is not true to the general perception of the people, as most statics go against the said theory.
Some investors may be nervous during October because some large historical market crashes occurred during this month.
However, according to data, October is the most volatile month in the stock market. There are more large swings in the stock market during October than during any other month. So, you need to be ready for some strong volatility during October.
16. The Worst Month is September For Stock Market.
We just discussed above that some people believe in ‘the October effect’. On the same idea, September is the worst month for the stock market and is also known as the September effect.
It has been observed historically that the stock market performs weak during this month. The actual reason for this effect is not known to us.
It could be that some people cash their returns at the end of the summer, causing some downturn. Another possible reason would be that some traders are taking vacations in August. And when they come back, they exit some of their positions to cash their returns.
This led to some selling pressure and decline. But these are just suppositions. Overall, the September Effect is just another anomaly.
17. The Fastest Fall in Global Stock Markets.
In the history of global stock markets, the ‘2020 Stock Market Crash’ was recorded as the fastest fall in the stock market of the entire world.
We are all aware that this crash occurred due to CORONA VIRUS pandemic and also referred to as the Coronavirus crash.
It began on 13 may 2019 and ended on 7 April 2020. During the crash, there were multiple severe daily drops in the global stock market, the largest drop was on 16 March, nicknamed ‘Black Monday II’ of 12–13% in most global markets.
18. The Longest Bull Market Run in History.
You will fascinate to know this stock market fact that, the longest bull market run was marked on August 22, 2018. It’s been 3,453 days of fairly steady growth since then, with the S&P 500 climbing by more than 320% over that period. The previous record bull run was set between Oct. 1990 and March 2000
You can see that here we have discussed a lot of fascinating stock market facts. These stock market facts also include lesser-known statistics.
Tell us whether knowing about them is exciting for you or not. It helps your perspective to realize how old the stock market is. Stock market bubbles have existed for numerous centuries. People, in my opinion, concentrate far too much on the stock market’s recent past.
They frequently disregard old history. Hopefully, reading this article will change some of it. We have also covered the topic of steps to financial freedom in our blog you can also read it and hope you will like it.