Assess the composition of your local exchange

A fundamental part of understanding how stocks work is to understand that different stocks will list on different exchanges. These exchanges are based in different parts of the world and the composition of the exchange will change depending on the location of it. For example, companies like Nintendo will have their primary listing on the Tokyo Stock Exchange (TSE). 

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In this exercise, choose the stock exchange that is closest to you geographically and assess the composition of that exchange.

Instructions

I’d recommend going directly to the stock exchange to find the constituents or components of it. Tools like Yahoo Finance can also be used for this.

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In this example, I’m looking at the New York Stock Exchange to find the top 10 companies listed. Familiarising yourself with the components of different exchanges can help you to understand where each of the companies is based and what you might need to do to buy a stock from that exchange.

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The Top 10 stocks include companies like: Berkshire Hathaway, Walmart and Visa.

Looking at the Nasdaq 100, we can see that the top companies listed there include Apple, Microsoft, Nvidia, Google and others.

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Pick a stock exchange of your own choice (perhaps the closest one next to you although not necessarily) and familiarise yourself with the components of that exchange. Make a note of the top 10 stocks listed on that exchange.