The history of the stock market is one full of quirks, anomalies, and quite unbelievable facts.
Here are five more you (probably) didn’t know…
1. The NYSE is the largest stock exchange in the world by market cap
The New York Stock Exchange (NYSE) is massive. But just how big are we talking?
Well, with more than 2,400 companies trading on it, and 1.6 billion shares traded every day, it’s a hive of activity.
And with a combined market capitalization of approximately $22.59 trillion (as of March 2018), it significantly dwarfs its nearest rival, the Nasdaq (market cap of around $11 trillion) as the largest stock exchange in the world.
Like we said. Massive.
2. China’s, on the other hand, isn’t as big as you might think
When you listen to early-morning financial commentators, they’ll almost always discuss what happened in China while you were tucked up in bed. This level of media coverage might make you think that China’s stock market is a major player, but the truth is, it’s not. Not yet, anyway.
At the moment, it makes up a very small percentage of the global equity market. Only 3.1% to be precise. Compared to the 51.3% the US represents, China has a long way to go.
3. Unlike October, September is actually a bad month for investing
Historically, on average, the stock market’s three leading indexes (the Dow Jones, the S&P 500, and the Nasdaq) have all performed poorest during the month of September.
Why? Well some believe it could be down to investors going on vacation, and holding back from selling stocks over the summer. Once they return to work and exit those positions, the market experiences increased pressure to sell, which in turn results in a decline.
Meanwhile, the so-called ‘October Effect’ is nothing more than a psychological quirk. Some investors might get nervous when October rolls around because a few of the worst crashes in history happened to take place in that particular month, but there’s no data to support it as a legitimate phenomenon.
4. Pirates in Somalia have set up a stock exchange to fund missions
Forget New York and London for a second, pirates in Haradheere, Somalia have set up a stock exchange to give Somali civilians the opportunity to invest in their hijacking missions.
How does it work? Each investor receives a cut of the ransom paid out on a successful mission. And you don’t have to use cash to invest either. One woman contributed a rocket-propelled grenade and received a $75,000 ”dividend” in return. Now that’s something you won’t see on Wall Street.
5. When the Indian cricket team lose, stock prices fall
According to researchers from an Australian University, a sharp decline in Indian stock prices takes place the day after India loses at cricket.
This curious anomaly is a great reminder that stock prices, while governed by supply and demand, are also at the mercy of an investor’s emotions. We might want to try and boil everything down to numbers and statistics, but we are, after all, only human. A bad mood caused by your favourite sports team losing can have wide-ranging consequences!