What Is Share Market and how to invest money ?

 WHAT IS SHARE MARKET ?

  • Stock Market, Share Market or Equity Market all three mean the same .These are markets where you can buy or sell a company's shares. Buying shares of a company means buying some percentage of ownership of that company, that is you become the holder of a percentage of that company, if that company makes a profit so some percentage of that profit would also be give to you. If that company incurs a loss, a percentage of that loss would also be borne by you. Telling you an example of this on the smallest scale, presume you have to establish a start up, you have 10,000 balance but that's not enough, so you go to your friend an tell him to invest another 10'000 Balance and offer him a 50-50 partnership, so whatever your company profit in the future, 50% of it would be your friend. In this case you've given 50% of the shares to your friend in this company. The same thing happens on a larger scale in the Stock Market, the only difference being, instead of going to your friend, you go the entire world and invite them to buy shares in your company.

 WHAT IS STOCK EXCHANGE ?

  • Stock Exchange is that place, that building where people buy and sell shares of the companies. The market can be divided into two types The primary market and the secondary market. Primary markets is where the companies sell their shares, the companies decide what exactly would be their share prices. Although there are some regulation in this too but the companies cannot maneuver too much because a lot of it depend upon the demand, how much price are the people willing to pay for the company's shares.

 WHAT IS SENSEX ?

  • Sensex show the average trend of the top thirty companies of the Bombay Stock Exchange, averaging out whether the shares of the companies are moving Up or Down.
  • The full form of Sensex, the sensitivity index, display the same 
  • The number of Sensex, that it has reached 57,000 marks. The number itself means not a lot the value of this number can be understood only comparison with the past number, because this number has been randomly decided, they decided at the start that the values of the shares of the thirty companies would be this so we compile all the numbers and then say that it is 500, so gradually the Sensex has been rising and it has reached the 57,000 marks in the past 50 years. So this is shows how far up have the shares prices of these thirty companies gone in these past 50 years.

WHAT IS NIFTY ? NATIONAL + FIFTY

  • NIFTY- National + Fifty (National Stock Exchange)
  • Nifty shows the price fluctuation of the shares of top 50 companies listed on the National Stock Exchange. 

HOW TO SELL YOUR COMPANY'S SHARE ?

  • If a company wants to sell its shares on the stock exchange, the this is termed as "public listing" (Public listing of a company) If a company is selling its shared for the first time, then it is called IPO- Initial Public Offering. That is offering the shared to the public for the first time 
  • Long end complicated process ( SCAM IPO). How easy it is to scam the people like anyone could get listed on the stock exchange with fake company and exaggerate the value and achievements of its company, they could lie to the people and the people would foolishly invest in this company, he then could abscond with the money, so it has become extremely easy to scam somebody. So as and when these scams happened, the stock exchange realized that they need to make their procedure stronger and scam proof. For this the resolution and rules were made stronger due to which there are very complicated rules today.
  • Securities and Exchange Board of India (SEBI) is a regulatory body that looks into issues like which companies should be listed on the stock exchange and whether it is being done in the proper manner or not. If you want to do this (i.e. get listed), then you would have to fulfill the norms of SEBI.

HOW TO INVEST MONEY ?

  • You merely need three documents
  1. BANK ACCOUNT 
  2. TRADING ACCOUNT
  3. DEMAT ACCOUNT
BANK ACCOUNT - A BANK ACCOUNT, because you need your money.
TRADING ACCOUNT - A TRADING ACCOUNT, to allow you to trade and invest money in a company.
DEMAT ACCOUNT - A DEMAT ACCOUNT to store the stock that you buy in a digital form.

INVESTING VS TRADING

       So, Investing and Trading are two difference thing.
  • Investing - investing means putting in some amount of money in the stock market and letting it stay there for some time.
  • Trading - trading means quickly putting in money at different places and withdrawing from some places. In fact trading of shares is a job in itself.

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