Profits Through Financial Markets

Essay by ozgurmadranUniversity, Bachelor'sA-, July 2010

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Is there any real profit in the stock markets in the long run? How do the fluctuations affect the marketability of stocks? What are the hints of successful fund managers? A case study from Turkish economic crisis.


Today's developing capital markets promise huge profits in short time or in contrast big losses risk at the same time. Because nobody is disabled from benefiting from those markets regardless of the amount they can invest. If acted carefully, there is no reason to accumulate small amounts as sufficient amounts to realize your dreams.

It is a long debate to guess future security prices and to make desirably huge profits. These debates started with the born of stock exchanges. Lots of investors trading in stocks are arguing that in the long run, all earnings are equal to zero. In other words, there are no real profits from financial markets. In the long-run, all price movements turn back.

However, there is a contrast opinion that it is possible to make profits. In order to make profits, it is enough to see a move at the start and take an action in accordance with this move and wait until it ends. According to this idea, if it was true that it is impossible to make any profit, there would be no big investors like Buffet, Soros, Templeton and so on, who are managing huge amounts of money and admired widely. There must be something missed to explain the existence of those investors. There are many fluctuations in the stock markets every day. Millions of people buy and sell stocks according to those fluctuations. Everybody has the best rational for itself. In the increasing trend eras, many various people start to invest in stock markets. However, during the recession times, this attitude declines. People...