UNDERSTANDING THE FINANCIAL MARKETS AND SHIFTS IN INVESTMENT BEHAVIOR

Abstract

This article explores the complex mechanisms of financial markets and the evolving patterns in investment behavior. Financial markets are integral to the global economy, encompassing the primary market for issuing new securities and the secondary market for trading existing ones. The primary market facilitates capital rising through methods like initial public offerings (IPOs), while the secondary market allows for the trading of these securities, with prices influenced by supply and demand dynamics. Recent shifts in investment behavior are driven by technological advancements and changes in accessibility. Innovations such as algorithmic trading, robo-advisors, and fractional shares have broadened investment opportunities and made markets more accessible. Social media and fintech have further transformed investment practices, leading to trends in ethical investing and increased short-term trading. Additionally, economic and geopolitical factors, along with demographic changes like an aging population and the preferences of Millennials and Gen Z, are reshaping market dynamics and investment strategies. Understanding these developments is essential for navigating today’s evolving financial landscape.