About Stock Market investment
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Information About Stock Market Investment For Beginners. 5 Advantages of Stock Market.

We all say Stock Market as share market. We can say it equity market also. A stock market is a place where we can buy or sell company shares. What is the share market? Like if you have to buy something then you have to go to the market then you purchase it, same thing same happens in a share market. In a share market, you can buy different company’s shares.

About Stock Market Investment

The share is a share of the company’s holding. So, you are going to get a part of the company’s ownership. Do you think that why we buy company shares and how can we earn profit from that share? So if you buy any company’s share then you have got some % of ownership in that company, if a company earns profit, then you get profit and if the company is in loss, then you also have to bear the loss in share market.

Share market is riskier because we have to be very cautious about future predictions. If we predict well then, we can earn good profit. Is there a story of share market? The beginning of share market was before 400 years. Dutch East India Company, which is known as Netherland at that time started the exchange of shares.

They are expiation from one country to another country and they have to travel thousands of kilometers to exchange shares and also through ships because at that time people were not rich. So, at that time sending a ship from one country to another country by one person was very difficult, so the owner of the ships started an offer.

The owner use to say that put your money in our ships and when a ship comes back and find some treasure then we will give some % of share to you. So, this is very difficult for some persons. When ships go to find treasure, not all ships return, some ships only come back. One person thinks and puts his/her money in 4 to 5 ships, thinking that from 4-5 ships 2-3 might return, from that the risk of loss is minimized.

From that time, share market was introduced and the same is applicable in today’s share market, never to invest all money in a single company… if that company goes in loss then our all-invested money will be lost. Now, you will know about stock market investment in this article.

How Does The Share Market Work

In India share market was started in 1950 by the Indian government, in development of the country share market plays a great role. The share market is one of the most important parts of the economy. When there was no facility of internet and mobile then all people use to gather around the market and then use to do auctions for a share. Now, you will know more about stock market investment in this article.

At that time sellers use to shout the prices and sell the shares to buyers, the shares were given in a paper format and no other legal proofs were required. Now-a-days, this whole process needs not be done, we just have to open a Demat account and link the same Demat account with the depository [an agent that stores our shares in electronic form].

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Whenever we wish to buy/sell shares, we just need to open the broker line or any trading app and just buy/sell the shares. Money will be directly debited/credited from our linked bank account. There is an organization which looks all control over the stock markets, which is known as SEBI[The Security and Exchange Board of India].

SEBI Has come into existence as a statutory body as on January 30, 1992 under the Securities and Exchange Board of India Act 1992. Its head office is in Mumbai. While regional officers are at Kolkata, Delhi and Chennai, SEBI is a statutory body regulating stock exchanges in India.

There are three main functions of SEBI, they are:

  • To protect the interest of investors in securities.
  • To encourage the development of securities market.
  • To regulate the securities market.

There are two main stock exchanges that have mostly all the company’s listed in it, they are:

1. NSE – National Stock Exchange

2. BSE – Bombay Stock Exchange

Basically, how share market works? In the share market, we can buy/sell those company’s shares only which are listed. For buying any share we can contact an agent or just we can use apps like Groww app, ICICI direct app, Angel one, Upstox, Zerodha etc.

If anyone is new to market then he/she can contact an agent and then do trading, just they need to give some commission as fixed by the agencies. If an individual is expert or having all basic knowledge for trading than he/she should invest directly through apps, by doing this we need not to give commission to agents. Few years ago, share brokers used to gather in the stock exchange of India at a fixed time, they use to deal the transactions through different signs and then buy/sell the shares.

Now, online Screen based electronic trading has come into existence in place of the old traditional system. Online trading System is in existence in all the stock exchanges of India. National stock exchange, Bombay Stock exchange and all other country’s Exchanges have adopted screen based online trading system right from their inception. Now, you will know about stock market investment in this article.

Bombay Stock Exchange and National Stock Exchange have introduced fully self-automated screen based trading systems all over the nation. The screen-based trading system of the National Stock Exchange is known as NEAT National Exchange for Automated Trading and the screen-based trading system of Bombay Stock Exchange Is known as BOLT-BSE Online Trading.

Investors can buy and sell their securities online because of the internet trading system. The order for Purchase and sale of securities are placed by investors through the use of internet in such a manner that they can be executed through broker. Let`s know about stock market investment in this article.

DEPOPSITORY:

Meaning and Explanation: In India, a company registered under the Companies Act can Perform work as Depository, Depository Act came into force from August 1996. Depository has to Obtain a certificate of registration from SEBI before starting its operation.

The operation of the depository is regulated by Depository Act and SEBI. Demat account and Dematerialization are at the center of the depository process. The primary function of a depository is to convert physical securities into electronic form and to Preserve it into electronic form. Above this, to provide service related to transactions of securities.

At Present there are Two Depositories in India:

NSDL – National Securities Depository Limited and

CDSL – Central Depository Services (India) Limited.

About Stock Market investmentAbove both are the depository that provides services through intermediaries, who are the representative Or agents who are called Depository Participant. Banks, financial institutions, share brokers can work as Depository Participant.

NSDL-National Securities Depository Limited

NSDL is a public company formed under the Companies Act. It was registered with SEBI in 1996. NSDL was promoted by National Stock Exchange and with the collaboration of some financial Institutions. It is managed by board of directors as the NSDL is incorporated in the form of public Company under the Companies Act.

NSDL performs its functions through depository participants appointed by it. Fees are charged from depository participant and not from the investor customers. An investor need not to pay any expense directly to NSDL. Depository participant charges some fees from the customer/ Investor. Let’s know about stock market investment in this article.

Types of Financial Market

 1. PRIMARY MARKET

In a primary market, the company will come first time in the stock market and will make funds by issue of IPO’s. Company will start its share by launching the IPO of their company in share market. The full form of IPO is initial public offering. From IPO company will get some money and IPO is for those companies who are new to the stock market. They will decide the price of the IPO and the IPO will be open for a specific period only.

The people will invest in that company, the company will take money from there and make a big fund. The rules and regulations of share market are decided by the companies, and the persons who have invested in IPO their money will go up and down after their shares price comes in the market. In short primary market is a market for newly issued securities.

2. SECONDERY MARKET

One who is already having the shares of a company can now buy/sell the shares from other buyers/sellers in the secondary market. Secondary market is also known as stock market. People exchanges their stocks and no one can decide any  stock prices, so that why the price of shares are depended on demand of that stock.

The secondary market is also known as exchange trade market. This is one type of regular market. Where the trading of shares are done on regular basis. The investor who has to invest are buying shares with the help of the broker in stock exchanges. In simple words, the place providing facility to buy/sell shares is called stock market.

In India there are many stocks market like National stock market, Bombay stock exchange, Kolkata stock exchange, Uttar Pradesh stock exchange, Kanpur Meerut stock exchange, Vadodara stock exchange, Bengaluru stock exchange, Madhya Pradesh stock exchange, Indore stock exchange etc. Totally there were 24 stock exchanges, but now there are only 23 stock exchanges. On 9thJuly, 2007 the Saurashtra Stock exchange was closed due to security reasons.

From this all-stock exchange, the most of the popular stock exchanges are NSE (National Stock Exchange) and BSE (Bombay stock exchange).

What Is NSE And BSE In Share Market

NSE (National Stock Exchange)

NSE was established in 1992, and the first electronic trading platform was established by NSE. The CEO of NSE, Mr. Vikram Limaya has provided all investors with a good facility for trading. In NSE there is NIFTY.

The website of NSE is www.nseindia.com and www.nseindia.com. US market is 3 trillion more than NSE (national exchange market). The National Stock Market [NSE] is the 10th biggest share market in 2021. In national stock market, there is registration of 1700 companies the volume of NSE is Rs.8,998,8111 crore.

About Stock Market investmentBSE (Bombay Stock Exchange)

BSE was established in 1875. This is one of the oldest stock exchanges in Asia, and this is the 10th oldest stock exchange in the world. This is situated in Mumbai on Dalal Street. BSE is the 9th biggest exchange of Rs.255.003 trillion.

The chairman of BSE is Vikram Jit and CEO is Ashish Kumar Chauhan. The website of BSE is www.bseindia.com. BSE types are BSE midcap, S& P BSE small-cap, S&P BSE midcap, S&P BSE large-cap and BSE 500 Sensex = sensitivity index Sensex show average trend of top 30 company stock price.

Sensex goes high about 40000. In BSE there are 5400 companies registered. In United States, the 70% GDP of the country was taken by corporate of biggest companies, while in India it is only 12-14% part was given to the corporate of biggest companies, from this only 7,400 companies are listed and from that only 4000 companies are registered with BSE and NSE. Let’s know about stock market investment in this article.

Advantages of Investing In Stock Market

If you have invested in best share then you get good returns from that share in a short time.

By buying shares, we get some % ownership of that company.

If the company in which we have invested makes good profit, then we will get good returns in form of a dividend.

You can buy or sell shares from home. In Market, there are many applications that will give you cash back and refund on your login and trading.

Now-a-days you can enjoy nomination facilities also.

Share market can be a more diversified short-term investment and more flexible long-term investment.

In the stock market there is no limit of investing money.

For investment, we just need to have a bank account and a Demat account, which we can open through online websites.

No stamp duty payable, reduce paperwork.

Majority ownership gives you the right to vote and express your views at the corporate level.

Information About Stock Market Investment For Beginners. 5 Advantages of Stock Market.Risk of Investing In Stock Market

If you have not invested in a good company and if it faces any loss, then you also have to suffer loss.

Now you can buy or sell stocks from home also but you have to take care of the platform which we are using, sometimes frauds might also take place.

If you have to learn share market, then you have to take time and do some research and then only invest money in stocks, otherwise, we will end up with loss.

It is difficult for capital market regulators to keep a close watch.

Brokerage commission and margin will be also given to the broker when you will buy or sell any stock, which will decrease your profit margin.

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