• Stock exchanges provide advantages when consumers invest and purchase products.stock market analysis screenshot image by .shock from Fotolia.com
  
  Many consumers invest in stocks listed on stock exchanges indirectly through mutual funds. Doing business with companies listed on a stock exchange, whether through investing in the company or purchasing products from the company, offers consumers several advantages.
  
  

Improvements

• When investors purchase shares of the stocks a company lists on a stock exchange, a company can invest the proceeds in ways that better the company. For example, a company can improve its relationships with customers or update the products it sells. By improving its business practices and products, a company is better able to meet its customers' needs.
  
  

Consumer Protection

• All companies that list stocks on a stock exchange are regulated by the exchange. While the regulations mainly serve to protect potential investors, the information provided to investors is publicly available and accessible to consumers. Consumers can use this information to gauge how well a company is performing and determine whether the company will be in business to fulfill any contractual obligations, such as warranties.
  
  

Investment Advantages

• Since stock exchanges list hundreds or even thousands of stocks, consumers have the opportunity to select which stocks meet their investment needs based on the risk of the stock and the return on investment in a particular stock.
  
  

Limited Liability

• When consumers choose to invest in companies listed on a stock exchange, they have limited liability. This means that if a company the consumer invests in does not do as well as expected, the only money the consumer will lose is the amount invested in the company's shares.
  
  

Income

• When a consumer invests in the stock market, whether directly by purchasing and selling stocks on the exchange or indirectly through mutual funds, the consumer is entitled to receive any dividends a company declares. The dividends provide extra income to consumers. In addition, when consumers purchase stocks, they can hold the stock until it increases in price. When a consumer sells a stock for a price that is greater than the purchase price, the consumer makes income from the transaction.