From the course: Understanding Capital Markets
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The shrinking stock market
From the course: Understanding Capital Markets
The shrinking stock market
- [Instructor] One important trend you need to be aware of if you're thinking about investing is what I call the shrinking stock market. The size of the US stock market by the number of publicly traded firms peaked in 1998 at roughly 10,000 companies. By 2018, there were about four thousand stocks traded on the NYSC and the NASDAQ. The shrinking stock market has largely been driven by large companies buying up smaller ones at a consistent rate and by fewer companies going public over time. So what does that mean for individual investors like you and me? Well for one thing, it means more competition in finding great stocks to invest in. An IPO or initial public offering is the first time that a stock is sold to the general public. Historically, the US often had maybe three hundred to 500 IPOs per year. These days, we often have a hundred or less IPOs per year. Now, the average IPO today is older and more stable than it used to be. Firms like Facebook and Uber provide good examples…
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