Public markets
What are they?
Public markets are financial markets in which financial assets that are available to the general public are traded. These markets include stock exchanges and trading platforms where stocks, bonds, mutual funds, and other financial instruments are bought and sold. Public markets are regulated by financial authorities to ensure transparency, fairness, and investor protection.
One of the main advantages of public markets is their high liquidity, which means that investors can buy and sell assets quickly and efficiently without significantly affecting their price. Additionally, these markets are open to all investors, both institutional and retail, making it easier to access a wide variety of financial products.
Key aspects to consider
Public markets are characterized by their transparency and regulation. Information about the traded assets, such as financial reports and prices, is accessible to all investors, allowing for more informed decision-making. Regulators, such as the Comisión Nacional del Mercado de Valores (CNMV) in Spain or the Securities and Exchange Commission (SEC) in the United States, oversee these markets to ensure that the rules are followed and that the markets operate fairly.
These markets offer greater liquidity compared to private markets, as assets can be bought and sold at any time during market hours, making it easier for investors to enter and exit positions. This, in turn, reduces the risk of being unable to sell an asset when desired, as can occur in private markets.
The ability to access these markets through online platforms and brokers has democratized access to investments, allowing even retail investors to participate in the buying and selling of assets from large publicly listed companies.