The primary function of money markets is to transfer money from parties that have “surplus” funds or savings to parties that have a shortage “deficit” of funds. The markets work to achieve an effective balance between the forces of demand and the forces of supply and allow complete freedom to conduct all transactions and exchanges. The importance of stock markets and their necessity centralized in societies that are characterized by a free economy and in which the economy depends on individual and collective initiative.
The stock exchange works on the convergence of two people or two parties: the seller and the buyer. These two parties do not know each other and cannot get to know each other. Thus, a share seller cannot know the person who is buying this share. The buyer may be a skilled professional or a simple shareholder. Everything is possible. The market in the stock market is directly affected by the number of buyers (demand) and the number of sellers (supply). By confrontation between supply and demand, the equilibrium price is maintained.
The idea of investment funds consists in a number of small investors pooling their money in order to invest in the stock markets by specialized institutions in order to achieve advantages that they cannot achieve alone, and not a specialist to invest his money himself.
