The stock market is one of the most vital components of a free-market economy. It allows companies to raise money by offering stock shares and corporate bonds. It lets common investors participate in the financial achievements of the companies, make profits through capital gains, and earn money through dividends—although losses are also possible. While institutional investors and professional money managers do enjoy some privileges owing to their deep pockets, better knowledge, and higher risk-taking abilities, the stock market attempts to offer a level playing field to common individuals.
The stock market works as a platform through which savings and investments of individuals are efficiently channeled into productive investment opportunities. In the long term, this helps in capital formation and economic growth for the country.