What Are Financial Markets?
Investing FAQs and Advice

What are financial markets? Knowing and understanding their purpose is the key to becoming a good investor. We've answered some common FAQs with simple, straightforward definitions from our investment expert.

This page is catered for the beginner investor who's looking for basic investment information (i.e. stock investing for dummies). If you're an expert in the field, you can go straight to the Ordering page for more advanced topics and inside tips.

Professional investors can also benefit from the "back-to-basics" teaching approach on this page. Having a complete and accurate understanding of the industry is the best way to improve the profitability of your existing investments.

Investing FAQs

Below are some common questions that the beginner investor may ask. We've answered them based on Dan Fournier's investment guide for both beginners and experts.

FAQ: What are financial markets?

Financial markets are a place where goods and services are traded (i.e. bought and sold). There are many different types of financial markets, but only a handful are used by most investors. As a beginner investor, it's important to understand the advantages and disadvantages of trading in the various markets.

FAQ: What are the main types of financial markets?

There are four main markets that most investors trade on:

Stock Market
Bond Market
Foreign Exchange Market (i.e. currency)
Commodities Market (i.e. energy, metals, grains, etc.)

Each of these markets has its advantages and disadvantages, and not all are suited for each investor. It's important to research the market and stay informed with changing trends before you make a financial investment.

FAQ: What is the purpose of financial markets?

Now that you understand what are financial markets, you may still be wondering why they exist. Investors rely on financial markets to help them buy and sell their securities (i.e. stocks, bonds, foreign exchange, commodities, etc.).

An important aspect of the financial market is the intermediary between the buyer and seller. For stocks, this would be the stock exchange, or more specifically the agent who makes the transaction for a client.

Some securities can be bought and sold directly, without the use of an intermediary. However, in most cases these institutions facilitate the process and maintain structure and organization within the market.

Your Questions Answered

Do you still have more questions beyond to "What are financial markets?" You can learn more with Dan Fournier's investment guide. This is the #1 resource for beginners, and will give you the knowledge and understanding you need to make a profitable first investment.

The advanced investor will benefit from Fournier's in-depth discussions and links to over 500 web resources. To learn more, simply visit the Ordering page on the left-hand menu.