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Market Differences The NYSE Is Thesis

Market Differences

The NYSE is an auction market, with live people making and facilitating each and every trade. NASDAQ, on the other hand, is run largely by computers, which are given lists of buyers and sellers by "market makers" that constantly update and effect trades. As an investor, it would not make a huge difference to me where a stock was listed; though there might be a slightly larger delay in the NYSE, the circumstances where a few seconds or even minutes would create a major difference in performance are extremely rare (Investopedia 2009).

A primary market is where securities are originally sold, with the proceeds going directly to the issuer of the security. Secondary markets involve trading in these securities on speculation of their value among investors; no additional money goes to the issuer. The secondary market trading of mortgage-backed securities helped contribute the economic entanglement and downfall (Investopedia 2009).

3)

Primary markets allocate resources to the best ideas and projects, and help form capital for the new ventures that are most likely to be successful. Secondary markets can help to bundle capital with the best managers of that capital, which can be used to generate capital in the primary markets, but in general the primary market is more efficient at allocating capital and of the two is the only one that truly generates new capital, as it funds actual production (Harris 2003).

4)

The Hussman strategic growth fund most closely aligns with my need for long-term financial growth and security, as I am still many years away from retirement, I do not need to take any unnecessary risks in order to achieve more aggressive growth. Though such a fund might be an appropriate secondary investment, the bulk of my capital should be somewhere safer and more assured (Hussman 2009).

References

Haris, L. (2003). Trading and exchanges: market microstructure for practitioners. New York: Oxford University Press.

Hussman. (2009. Accessed 24 September 2009. http://www.hussmanfunds.com/

Investopedia. (2009). Accessed 24 September 2009. http://www.investopedia.com/

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