The 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 which means, you become the holder of a percentage of that company If that company makes a profit, some percentage of that profit would also be given to you. If that company incurs a loss, a percentage of that loss would also be borne. (the stock market for beginners) let’s understand it with an example.
You have 10000 rs, but that’s not enough so, you go to your friend and tell him to invest another 10,000 rs and offer him a 50-50 partnership so whatever your company profits in the future, 50% of its would be your friend’s. In this case, you’ve given 50% of the shares to your friend in this company. The same thing happens in the stock market on a larger scale. The only difference, being, instead of going to your friend, you go the entire world and invite them to buy shares in your company(the stock market for beginners)
The market can be divided into two types – The primary market and the secondary market
Primary market –
The primary market is the market where the companies sell their shares. The company decides what exactly would be their share prices although there are some regulations in this too. The company can not maneuver too much because a lot of it depends upon the demand
Secondary market –
The companies cannot control the prices of their shares in the secondary market. The share prices fluctuate depending upon the demand and supply of the company shares. So the prices of the shares fluctuate depending upon the demand-supply
what is the stock exchange?
A stock exchange is that place or building where
people buy and sell shares of the companies
India,s stock exchange:-(stock market for beginners)
Almost every big country has its stock exchange. There are two popular stock exchanges in India. One is the Bombay stock exchange which has around 5400 registered companies and the other is the national stock exchange that had 1700 registered companies. With so many companies registered in the stock exchange, if we went to observe, overall, whether the prices of the shares of the companies are moving up or down, how do we view this? To measure this, some measurements have been put in place- Sensex and Nifty.
It shows the average 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
The nifty shows the price fluctuations of the shares of top 50 companies listed on the national stock exchange
How to buy shares?
You need three things
A bank account because you would need your money
Trading account, to allow you to trade and invest money in a company
Demat account to store the stocks that you buy in a digital form. The first thing you need if you want to buy and sell stocks is a way to buy sell and have or create a Demat account
To receive salaries or to send money to someone. You need a bank account the same way you will create a Demat account
where you will receive stocks that you buy and for the stocks you sell
People often think that stock investment is a complicated concept to understand.Especially stock market beginners.This is very big, which goes through broker or dad, s friend who handles their money, or just investing in mutual funds don’t want to risk anything.
Stocks are simple shares that are there in a company share means one certain part of the company. The bigger the company is, the larger the shares will be. And every share will have a cost. This is the fundamental building block.
So whenever you are investing in stock, you are not buying those stocks. You are essentially buying shares of a company. You are buying a part of a company. And by this, it means that you are buying something, which you have the same faith.
Let’s assume that you are a customer of Jio. you have an internet connection and mobile connection of Jio, and you feel that Jio has made your life easier. You. Your internet speed is too fast. So you feel that Jio is an excellent company, Now if there are so many people. Who are paying bills to this company, then the same company is bound to perform better.
That is what stock investment is. It is your confidence or your commitment to a certain company and its future