What is the share market?
Share Market is also called Stock Market and equity market. Share market is the aggregation of buyers and sellers of shares which represents ownership claims on the business. It is very useful for starting a large-scale business.
Starting a large business requires a huge amount of investment. But that investment alone (owner) cannot pay off. To solve this problem they divide the company shares into several shares and put them in the stock market so that they can get investors to buy the shares. Anyone can buy these shares as they want that.
Technically, "A company is a group of people create a system and capitalize on it issuer or supplier of goods worth capital, some business or profit and loss from starting a business is what they share".
The stock market is a device for transferring money from the impatient to the patient.
- Warren Buffet
In the share market, you'll earn in two ways,
Trading
Trading is something that can happen in a short period of time. For example, suppose you are buying ten shares of a company. You buy a share for a thousand rupees in the morning. In the evening you bought the shares that the company is heading towards profitability. Then the value of your share will rise. Then you sell your share to others and make some profit. This is called trading. That is buying shares and immediately selling them for a small profit is called trading.
Long Investment
Long investment is the opposite of trading. A long-term investment is the act of buying a large number or a small number of shares of a company and selling it for a high profit after a long period of time. This will probably make a very, very high profit like 100 or 200 times of investment.
Share Market Nature
Properties of share market
1. Personnel Property
The share is a legal individual. Members cannot claim any ownership over the company property.
2. Long term investment
A share is created by law. Its life can only be ended by law. The life of the shares will continue even if the life of the shareholders expires. Events such as loss of performance and loss of mental balance of shareholders do not affect shares.
3. One share is equal to One right
One share is one vote is the voting principle of the corporation. That means if a person has ten shares he has 10 votes. The vote means the right of the company.
4. Private and individual legal
Share is an individual that acts Spontaneously from members(investors). It has its own unique name and seal. It differs from its members (investors) in owning assets and liabilities.
5. Responsibility
The responsibility of the shareholders is defined. The liability of each shareholder is limited to the unpaid amount of shares he holds. It shouldn't seize the member's own property if its assets are not sufficient for the company's debt.
Benefits of share market
1. Big Investment
It is possible to mobilize more investment in it than in private business and partnership business. For example, recently reliance telecom buys his lot of investment in the share market. This makes the company a debt-free company.
2. Stock exchange
The exchange of stocks between two individuals is easy. So the investment is a simple thing. A shareholder can easily buy and sell shares for cash.
3. Longevity
The life of the stock is long-lasting. Anyone can buy stocks and become a shareholder. The stocks can be sold to anyone at any time. But stocks are sustainable. It is the continuity of stock that makes the stock suitable for long-term capital.
4. Economic progress
The biggest companies support the economic growth of the country. Stock companies are able to produce massively because they operate with a large financial resource.
Risks
There is as much risk involved as there is profit in doing this. The value of the share will also decrease if the company moves towards loss. If a country's economy falls then the share market will also fall. some other risks,
- Market risk
- Trade risk
- Fraud risk
If a giant shareholder did fraud in the market then it'll affect small sharemarketers. And you can't give assurance about the market value. It'll increase as well as decrease. So if you're trading be careful with that.
How to start
Nowadays trading is very easy. We can currently trade even apps and websites. There also plans such as mutual funds. And we can trade through brokers. When we trade with brokers we have to give them a small commission from it.
To start investing in sharemarket three things we need. 1. Bank account 2. Demat account 3. Trading account. You can create demate account by yourself or with the help of your share market broker.
Price is what you pay. Value is what you get.
- Warren Buffet
0 Comments