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The financial market is a tool for the redistribution of funds

The financial market is a community of financial instruments and resources that allow you to deal with the purchase and sale of various assets, such as securities, precious metals and others. Its main function is to move free capital from one market participant to another. In simpler terms, it helps the seller and the buyer find each other, just like any kind of market.

The financial market is a means that helps to exchange different goods through a monetary equivalent, promotes capital accumulation, financial risk management and international trade. The global financial market is a tool that allows you to do the same on a global scale. The market can trade in any one particular asset. Then it is called specialized. Instruments of this market are financial liabilities of issuers - buyers of cash.

There are different sectors and market segments that differ in the types of assets, services and tools that they turn into, as well as the forms of purchase and sale procedures and the various conditions of transactions. Given the existing differences between the financial market sectors, there is an object with which they are united - free financial resources. The most significant is the division of the market into sectors by different types of services and instruments. The financial market on the basis of these principles is divided into:

  • Financial securities market;
  • Money market ;
  • Futures market;
  • Debt capital;
  • currency market;
  • Market of insurance products;
  • real estate market.

The financial market is a set of tools and tools that allow you to mobilize temporarily free funds and turn them into capital. Not accumulated by the population, enterprises and the state participate in the trading processes in the financial market, not to save them, but to multiply them by making a profit. Some segments of the financial market can yield very high rates of return, but the risks are very high. The transformation of savings that could be stored "under the pillow" from the population and outside the turnover of enterprises, into capital allows to stimulate and accelerate the growth of social production.

The financial market is a very effective tool that helps to effectively allocate accumulated capital between end-users. It identifies the level of demand for various types of assets and contributes to its speedy satisfaction. With the help of market mechanisms, resources are allocated very effectively. First of all, the requirements for investments of enterprises that can ensure a high return on invested capital are met. Redistribution of investments in high-yielding spheres allows to increase the production of demanded products, thereby increasing their supply in the market and balancing the price level.

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