The share market is a place where investors buy and sell stocks. It provides an opportunity to those who want to earn profits by investing in the institution. In India, the stock market is mainly based on two major exchanges: Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Let’s learn how the stock market works and how to invest in it.
Introduction to the Stock Market
In the stock market, brokers sell electronics by selling their stocks to the public. In return, business units receive stocks. When the profit of the enterprise increases, the value of their stock also increases, which benefits the enterprise. But note, there are also risks associated with investing in the stock market.
How does the stock market work?
The stock market includes many innovative functions, mainly including IPOs, market demand and sale, and share trading.
- IPO (Initial Public Offering): When a company sells its shares in the market for the first time, it is called an IPO. Businesses are companies that get funds through IPO and this gives the general public a chance to hold their shares.
- Market demand and packaging: The price of any share in the stock market is decided according to its demand and packaging. When the demand for a share is high, its price increases and when the demand is low, the price decreases.
- Share trading: Once the company’s shares are listed in the market, people can buy and sell them. There are two types of trading – intraday trading (intraday trading) and delivery trading (delivery trading).
- Intraday trading: In this, you have shares and stocks in the same day, so that you can make a profit from share trading in a day.
- Delivery trading: In this, you can buy shares and keep them for a long time and make a profit when the price increases in the future.
Types of Investment in Stock Market
- Equity: In this, you are directly directed towards the shares of the company, which gives you a stake in the company.
- Franchise Fund (Mutual Fund): In this, your money is invested in various stocks and bands, which is managed by a financial expert.
- Bond: This is a type of debt investment, where you lend money to a company or government and get interest in return.
How to invest in the stock market?
- Demat Account: A demat account (Demat Account) allows you to hold your stocks in digital form. It can be opened with any bank or brokerage firm.
- Choose a Broker: For trading in the stock market, it is necessary to join a brokerage company, which provides you assistance in investing.
- Investment Plan: You have to make a plan for investing in the stock market. Invest keeping in mind your risk-taking capacity and goal.
- Choose Stocks: Based on your research and expert advice, choose stocks that may be of interest to you.
- Get regular updates: There are fluctuations in the stock market, so investors should keep getting updates from time to time.
Benefits of investing in the stock market
High profit in the long run: If you invest for a long time, it can give you good returns.
- Benefit of dividend: Many companies give a part of the profits to their advisors, which is called dividend.
- Portfolio diversification: You can invest your money in different companies and enterprises, which reduces the risk.
Risks and precautions
Investing in the stock market can be magical, but there are risks associated with it. Some precautions: – Avoid trading without information.
- Analyze the financial position and progress of any company before investing in it.
- Always pay attention to your risk-taking capacity.
Conclusion
Investing in the Indian stock market is possible, but it requires the right information, planning and guidance. If you are a new trader, start slowly by learning and taking advice from experienced entrepreneurs. The secret of success in the stock market lies in courage and right decision.