Guide: What is a Stock – Stock Market Information
Article: Beginners Guide to Stock Market India, What is a share – In this informational article of the stock market, you will know in detail what is a share in Share Bazaar, how to buy it, and how you can invest in it, etc. The information that will help you to a great extent in understanding the stock market.
Here is completely explained video of Basics of Stock Market, if you’re a video kind of person. Otherwise, continue reading. Cheers!
Here is the principle of the Stock Market – “Buy cheaply, sell expensive”.
Many people consider buying shares from the stock market as gambling, I do not believe this statement. Some people even give it the title of a dangerous game, but I don’t see anything dangerous in buying shares. Yes, there is one thing, if you make fun of buying shares from the stock market or invest randomly, then it can really be a gambling and dangerous game for you. Now read about its specifics.
Are The Share Market And Stock Market The Same?
A share market or stock market is a market that deals with buying or selling of any kind of securities. Both share and stock are the same in some ways. Although, the difference comes from the context in which stocks and shares are used. A share can be partially paid or fully paid, but stocks are always fully paid.
A company requires huge capital to run, and no single person can invest such large capital alone.
Therefore, the capital of companies is divided into small parts, so that common people can also invest their money in the company. These parts are called stocks. This would benefit both. In a way, the shareholders who buy the shares of a company are equal to the percentage of profit made by the company.
Think of it this way – Suppose a company needs capital of one crore rupees, of which only fifty percent shares are publicly available for sale. Because fifty lakh rupees have already been planted by the company’s promoters, due to which they have a fifty percent share of the company.
Now fifty percent of the shares are available in the stock market for sale, out of which you bought one percent of the shares, that is, you invested one lakh rupees in that company, thus you own one percent of that company. You will get one percent of the profit that the company will make (with the brokerage) and if the company will lose, then you will also lose.
India has two market shares
Mumbai Stock Exchange (SENSEX) – Bombay Stock Exchange – BSE (Sensex)
National Stock Exchange, Delhi (Nifty) – National Stock Exchange – NSE (Nifty)
Types of Shares – Types of Shares
There are many types of share issues in India, some of which are the major shares that are discussed more.
Benefits of buying shares
You can get good returns by buying shares. There are many companies registered in Share Bazar or Stock Market, out of which you can invest your money by choosing any good company.
It is better to rotate the money in the bank and invest your earnings in the stock market, but wisely. Because sometimes doing this can make you a millionaire, sometimes you can convert millions of rupees into thousands. There is a risk in this.
When Should You Buy Shares?
You can buy shares at any time, there is no special time. You can buy shares at any time if the market is slow or is fast. Due to a festival or on special occasions, profits of companies increase their share prices, which then decrease further, at such a time if you buy shares at the increased price, you may incur losses later.
Buy shares at a time when you think that the market will gain in a few days. You can do this through intra-day-trading in short term investment. But the best investment is long term investment, which if it is done for at least two to three years, then there is sure to be profit.
What To Buy In Stock?
While buying shares, you should never get into the words of your broker. First, do the research by yourself then buy the stock of a company. Always buy good company shares whose economic condition, management is very strong.
According to me, if you are new, then you should buy shares of a company whose products we use every day in our lives, or see someone doing them.
Like you can invest in a company – Toothpaste, Soap, Oil, Ghee, Phones, Vehicles, motorcycle, food products, bike, etc. Choose companies whose names are known to all.
How To Invest In Stocks – How To Invest In The Stock Market
Do the research and planning well to buy shares. Learn the basic tips of investing in the stock market first. There is no question of cheating in buying shares, as companies or brokers who sell shares are regulated by the Securities and Exchange Board of India ( SEBI ).
Buying shares has become much easier now than before, if you have a laptop and internet connection, then you can easily buy shares from any stock market.
Nowadays, many brokerage houses also provide an app for investors, so that you can give any instruction related to the purchase and sale of shares to your broker.
Note: If you are a new investor then start with small investment first, do not invest money in big companies beforehand. Do not buy shares of more companies and do not invest all the money in companies in the same sector.
To buy shares from the stock market, you need a stockbroker. They act as a middle man between the stock market and shareholders.
What Is The Function Of Stock Broker In The Stock Market?
Common people cannot buy and sell shares from the stock market. Only a member of any stock exchange can buy and sell shares from there. These members of the stock exchange are called brokers.
All these brokers are registered in SEBI. While investing in the stock market, you will find a lot of brokers, out of which you can open your trading account with any good support and service online or any other trading companies.
Some of the major online internet trading companies are – Zerodha, ICICIdirect.com, HDFCsecurities.com, ShareKhan.com, IndiaBulls.com.
To invest in a share market, you need three types of accounts. For equity investment, there should be a savings bank account, demat account, and trading account.
Nowadays, there are many trading companies that provide the facility of opening all three types of accounts simultaneously. You can open 3 in 1 account in companies like Kotak, ICICI, SBI, etc. , this is the best.
You should open an account with SEBI in Registered Brokerage Companies only. – The stock is purchased through a trading account and is kept in demat, while your profit is transferred to the savings account.
Demat Account is also called Share Depository Account. You can easily open it at any Depository Participants. Currently, National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CSDL) are the two major depository participants. But we recommend you again that you open only 3 in 1 account, this will help you.
How To Invest In The Stock Market
There are two main ways to invest in the stock market – Intraday-Trading and Delivery Based Share Investment
Information On Intraday-Trading In The Stock Market
In such an investment, the purchase or sale of shares or equity has to be done on the same day. As soon as you came to know that the value of the share of a company is going to increase today, you bought it in the morning at a lower price and sold it back in the evening at the increased price of the stock.
There is a risk in this, it is like gambling because if you bought the stock of a company about which you came to know that today the shares of this company will increase but in the evening, due to some reason, that company’s If the price of the stock decreases further, you will lose a lot. In such an investment, it is mandatory to buy and then sell the stock in a single day.
Delivery Based Share Investment
This is the best way to invest in Share Bazar. In this, after purchasing the shares of a company, you can keep a deposit in your demat account as long as you want. Any company sees its profit, it is well known that if you are investing your money in a company, then in two to three years it can happen that the value of the share of that company is higher than before. Share prices increase, then you sell the shares of that company, then you will profit. There is more brokerage in this.
How To Sell Shares And Earn Money?
While investing in the stock market, you should avoid greed and invest for a long period. When you buy shares in the stock market, set a target to sell it. When your share reaches the target price, then sell it.
There are two ways to earn money from the stock market.
Dividend: If the company you have invested in will benefit you, then you too will get a share of your profit. This is called the dividend.
Share Value Growth: Second is the growth of share value, that is, you can earn money by selling shares. In this, you buy a company’s stock at a lower price, and when the stock price of that company increases, then you sell your purchased stock at an increased price.
After buying the stock, chose a target to sell it, I have bought this share at this price and when its price will increase this much, then I will sell it.
Always remember that you sell your stock as soon as your target is met. Do not be tempted, because sometimes what happens is that when a company is earning well, and the share price increases, the shareholders’ targets are met, then they do not sell their shares but out of greed wait and think that we will sell when the value of the stock increases.
But the opposite happens, after a few days of good performance, the company may fall in the face and its share price may be lower than before.
You can use your intelligence. You can use the Stop Loss term of the stock market to avoid such an incident with you.
This gives the advantage that as soon as the share price starts to fall, then your stock is automatically sold by your broker at a certain price. This saves you from taking the loss. Thank you and must share it with your friends, it is possible that your friends are also looking for this type of Valuable Guide on Stock Market Investing.
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Article: What is a share – The information about the stock market and how to invest in the stock market is written for you in broad, easily understandable terms, it took me three days to write it.