Because of the COVID-19 pandemic, a lot of changes have occurred in the stock market. Leading IT company, transportation company, industry company, shopping company, almost every company's stocks are increasing. Therefore, many people flow into the stock market. However, most people do not know about stock well.

Stock is a certificate of commitment to receiving investments and making profits and returning those

▲ It`s a stock of the Dutch East India Company that was actually used.

profits to people who have invested in a company. Also, a corporation is a company that uses stocks. Corporation first occurred in the Netherlands in 1609, at a Dutch East India Company. In the 16th century, The Age of Discovery led Europe's economy. Many people invested in ocean commerce. However, crossing the ocean was so dangerous that the risk of ocean commerce was very high. Therefore, to reduce this risk, people started to invest together, took the risk, and got profit just as much as they invested. This became the origin of stocks and corporations.

Then, why companies make stocks, and why people buy them? First, the reason of making stocks is simple, companies do not have enough money. There is no company that can operate only with internal funds. So, companies must raise funds from outside, and one of them is through stocks. Meanwhile, the reason for buying stocks is a little complicated. Basically, people just buy stocks to get profits. However, stocks' value changes every time. This value is set by the interest rate. When the interest rate is low, it causes a lot of money in the market to fall in value, so prices rise, and as prices rise, people buy stocks because they do not deposit money in banks. On the contrary, if the interest rate is high, prices do not change a lot, and people deposit money in banks and do not buy stocks.

This explains the reason why the stocks' value has increased now although the real economy is not in a

▲ The graph of Samsung`s stock.

good condition. It is because of low interest rate. However, many experts say a warning about this economy. They said our stocks economy is almost the end of a bubble. We must be cautious about it because we can face a great economic problem. We should not earn money too easily. If we make an effort in our work, we will receive a reward.

April 10th, 2021

by Ju Yup Je