Whether one realises it or not, the global network of stock exchanges is an integral part of our modern- day lives. Over the years, stock markets have become key indicators of how countries are doing economically and financially.

Stock market ups and downs have had both positive and negative effects on individuals, companies and ultimately, national economies. Stock markets serve as growth vehicles for a country’s growth in industry and commerce.

In simple terms, the stock exchange is an arena in which goods are bought and sold in the form of what is known as ‘securities’. Depending on which country it is in; these securities include equities (that is, shares in a company), bonds and derivatives.

So, where did it all start? Long before the first stock exchange was formed, merchants and moneylenders had been trading goods and lending money for centuries. In 1531, the Belgian city of Antwerp had a stock exchange in which moneylenders and brokers dealt in government, business and individual debt. Although this resembled a stock exchange in the sense that it was an arena for trade, no company stocks (shares) were traded as this did not exist at the time.

The stock exchange, as we know it today, owes its origins to a company called the Dutch East India Company, also known as the Vereenigde Oost-Indische Compagnie (VOC), which was established in 1602.

It had a very lucrative 21-year monopoly on the Dutch spice trade between the Dutch Republic and what is now Indonesia. The VOC experienced previously unseen profits and dominated the international spice trade for much of the 17th century.

More importantly, it was the first company to issue stock. In doing so an exchange was created for trading the stocks and bonds that they themselves printed, and so the Amsterdam Stock Exchange was created. The Amsterdam stock exchange is widely considered to be the oldest stock exchange in the world.

Since then, stock exchanges have been established in countries all over the world. The largest stock exchanges can be found in the United States (the New York Stock Exchange and NASDAQ), the United Kingdom (the London Stock Exchange) and Japan (the Tokyo Stock Exchange).

There are currently just eight countries worldwide that do not have a stock exchange. In 1969, the Jamaican Stock Exchange (JSE) was established. It trails the Trinidad & Tobago Stock Exchange in terms of size and is split into four different markets including the Main Market, Junior Market, Bond Market and lastly the US-denominated Market.

There are currently 37 companies on the Main Market and 24 on the Junior Market. Like other stock exchanges around the world, the purpose of the JSE is to facilitate the movement of capital to create growth for companies and individuals.

A major player in the development of the JSE is what is known as a stockbroker. Stockbrokers essentially act as middlemen between clients and the JSE. They are registered with the JSE and authorised by the Financial Services Commission (FSC) to buy and sell securities on behalf of their clients.

Some Jamaican brokerage firms include Stocks and Securities Ltd, Barita Investments Ltd and Victoria Mutual Wealth Management Limited. Some brokerage firms will require relatively large initial deposits from clients while at others, clients can start off with a mere $5,000.

In exchange for a fee (also known as a ‘commission’), stockbrokers will execute trades for their clients in a timely fashion and, perhaps more importantly, also offer financial advice if the client requests it.

It is always a good idea to do your own research and be somewhat familiar with the intricacies of the financial markets before investing your hard-earned money. There is always risk involved with investing and the more one knows, the more likely one is to avoid poor financial decisions.

However, with global interest rates experiencing a decline, there may be more opportunity for higher return rates (even if they are minimal) in the stock market.

Monitoring the performance of certain companies, reading up on current events and familiarising yourself with financial jargon are all good starting points before entering the investing scene. Whether you are young or old, it is never too late to start learning about the markets and investing.

The more you learn about it, the more comfortable you will be with investing your savings in the market. Get reading, researching and start paving the way to your investment portfolio!