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In general, a distinction is always made between the primary market and the secondary market on the stock exchange. Companies use the primary market to obtain equity capital (share issues) through an initial public offering (IPO) or to obtain debt capital (bond issues). Bondholders typically achieve a profit on the primary market through the interest income generated by investing their capital.

If you, as an investor, buy or sell stock X, then you are trading on what is known as the secondary market. As a shareholder, you benefit from the rising share prices of your investments and the resulting dividends paid out to you.

Many people know that the price of a stock can go down as well as up. But only a few know what causes these fluctuations and what factors drive these price movements.

Since 1996, trading on the stock exchange has been carried out digitally. Traders submit their buy and sell orders via the electronic trading system of the respective exchange operator. The system automatically sets the prices – with the aim of bringing as many buyers and sellers together as possible.

If you buy stocks, after the transaction has been executed the securities will be stored in your electronic client custody account at your bank. Exchange trading as such is not free of charge, meaning that you pay a fee, known as the brokerage, for each transaction. You also pay custody fees, among other things; these are usually charged to you each quarter.

As an investor, your aim is to make a profit and therefore systematically build your investment portfolio. But how can you actually make money on the stock market?

The most common way, for example, is to buy share Z at a certain price and sell it later at a higher price. In the best-case scenario, you also benefit from a dividend distribution (profit sharing in company Z) on top of the increase in the share price.

In the case of a “short sale”, by contrast, you sell a stock that you don’t actually own – but that you have borrowed for instance from the bank for a fee. You are betting that the price of the stock will fall.
Example: You sell the borrowed share Z for CHF 1,500 and buy it back later for CHF 1,250. After deduction of the lending fee of CHF 10, you will be left with a profit of CHF 240 (difference in stock price minus the lending fee). You then return the share to the bank.

However, the stock market participants with the biggest chance of success are those who take a long-term view and first define their investment profile and investment goals, as well as set an investment strategy, which they then consistently stick to. This process is complex, which is why it is worth tapping into the know-how of your wealth expert.

Even if you’re not a seasoned investor, you’ll no doubt have heard people talk about bull markets and bear markets. But what exactly is meant by them?

On the stock exchange, “bulls” are considered to be optimists: they invest their money in the belief that stock prices will rise. “Bears”, by contrast, are pessimists. They bet that stock prices will fall. These two metaphors and the associated traits gave rise to the terms “bull market” and “bear market”.

A bull market or a bear market reflects investors’ behavior and their optimism or pessimism. If general stock prices rise over an extended period and investor sentiment is considered good to euphoric, we are said to be in a bull market.

By contrast, if stock prices fall by 20% or more across the board, we talk about a bear market. This is also the case if stock prices fall continuously for at least two consecutive months.

If the bulls are in the majority, this means for you as an investor that momentum is good and stock prices are rising. At this point, however, you may ask yourself whether you should sell certain positions to realize your capital gains. The best way to do this is to contact your financial expert.

The situation becomes more challenging when the bears have the upper hand. Less experienced investors in particular tend to act impulsively and without careful consideration during such phases. Yet, in a negative stock market environment, it’s especially important to keep a cool head and stick to the investment strategy you have defined. After all, every bear market is followed by a bull market: so the longer your investment horizon is, the greater your chance that stock prices will recover.

The New York Stock Exchange is probably the most famous stock exchange in the world. Wall Street is not only the most well-known but also the largest stock exchange overall. Its market capitalization is around CHF 25 trillion (2024).

In Switzerland, SIX Swiss Exchange is the largest and most important stock exchange (market capitalization of approximately CHF 1.4 trillion). It was formed in 1995 through the merger of the three stock exchanges in Geneva, Basel and Zurich. A smaller Swiss exchange specializing in SMEs is the BX Swiss.

Among the most important stock exchanges in Europe are the London Stock Exchange, which is the largest, and the Deutsche Börse in Frankfurt. The biggest stock exchange in Asia is located in Shanghai. The stock exchanges in Hong Kong and Tokyo are roughly of the same size and significance.

The stock exchange guarantees transparent pricing and efficient execution of all stock market transactions. Trading is completely digital; traders enter their buy or sell orders into the respective trading system, which then calculates the price. The stock exchanges in Switzerland are supervised by the Swiss Financial Market Supervisory Authority, FINMA.

As an investor, you can profit from both rising and falling stock prices. In both cases, it’s advisable to seek support from a financial expert. Supply and demand are two of the factors that play a role in whether the price of stocks rises or falls. Other factors include the listed companies themselves, the economic situation and outlook, interest rates and inflation. Geopolitical tensions can also affect stock prices.