Many people mistakenly believe that if they do not trade in the stock market or manage investment portfolios - stocks are really irrelevant to them.
However, the largest investors in Israel, the institutional bodies - the provident and continuing education funds, the insurance companies and the pension funds - manage more than 70% of the public's investments, and about 46% of them are invested in shares.
As for the company that issues shares, they allow it to raise capital from the public who invest in the stock market for the purpose of developing new products and improving existing ones, entering new markets and more.
As far as the shareholder is concerned, this is a financial asset, which gives him a share in the ownership of a company according to his investment in them - in voting rights at its general meeting, in its distribution of profits and in rights at liquidation.
The investor becomes a partner in the company and can enjoy dividends - profits or financial surpluses that the company distributes to investors, usually once a year, relative to the number of shares held by each of them.
One stock exchange operates in Israel, on Sundays-Thursdays, and shares of more than 500 companies in a variety of industries are traded there.
Changes in the price of a stock or stock indices reflect the average price level of selected stock groups traded on the stock exchange.
The changes in the indices express the return to investors in those shares.
Stock prices rise and fall in accordance with the selling or buying instructions of private and institutional customers - instructions that result from reactions to events in the global and local economy, changes in specific companies or due to the liquidity needs of customers.
Frequent changes in the economy and companies, as well as changes in personal life - such as marriage, childbirth, retirement and more - increase the need to periodically review the household investment portfolio, including pension assets and liquid and illiquid assets, and examine the distribution of investments between channels (shares, fees Debt, real estate, etc.). This is to check if they are in line with our preferences and expectations, as well as with the level of risk we are willing to take, and make the required changes.
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