The secondary market is also known as the stock market or stock exchange. It is a market for the purchase and sale of existing securities. It is the market where previously issued securities, such as stocks and bonds, are traded among investors. It helps existing investors to dis-invest and fresh investors to enter the market. It also provides liquidity and marketability to existing securities.
It is also the market where investors buy securities from other investors, and not from the issuing organization. It also contributes to economic growth by channelizing funds towards the most productive investments through the process of disinvestment and reinvestment.
Advantages of Secondary Market Research
(1) Time and Cost effective: Usually time and cost required to collect secondary data is less than efforts required to collect primary data.
(2) Extensiveness of data: Data collected by governments and other institutes is usually very extensive and covers a large spectrum of issues.
(3) Basis of Primary Research: Data collected from secondary sources gives an idea to organization about effectiveness of primary research.