What is Share Market?
Stock market is a financial market where people buy and sell shares of companies. It is also called stock market. The stock market is a platform for investors to participate in the growth of companies, diversify their portfolios, and potentially earn returns.
1.The stock market reflects the collective value and performance of companies.
2.The stock market is an excellent means for businesses to raise capital from investors.
3.In the stock market, investors buy shares at a fair price and receive a share of its profits.
4.In India, the major stock exchanges are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
5.BSE was established in 1875, while NSE was established in 1992.
In terms of trading, NSE is the largest stock exchange.
Share market in simple words:
It serves as a platform for buying and selling various finacial instruments, including equities, derivatives, currencies, and debt securities.
Types of stock market:
Broadly, there are two types of shares – equity shares and preference shares. Equity Shares: Equity shares are known as common shares.
1.Equity share
The equity market is where companies selll ownership (Shares) to investor. Buyers submit bids, which is the prince they are willing to pay. Sellers set ask prices, which is the minumum price they will accept. Brokers help negotiate a final price, and if a buyers and seller agree, the trade happens. The buyers pays the total cost (stock price multoplied by number of shares, plus fees) and the shares are deposited into account.
2. Preference share
Preference shares are usually bought by investors who are looking for a more secure investment with a fixed income. However, they usually don't have voting rights in any business proceeding.
Companies can issue preference shares to raise additional capital for the business. However, the limited number of people who invest in preference shares can make it difficult for companies to raise large sums of money through this means.
Things to keep in mind before investing:
Share market for beginners can enter many questions. Therefore, investors should consider the essential factors to keep in mind before investing.
1. Before diving into the stock market, think about what you want to achieve with your investments. Are you saving for a vacation, a home, or retirement? Your goals will help you decide which stocks to buy and for how long to hold them.
2. See how much risk you are comfortable with. If you are someone who likes steady and safe returns, then you may want to stick to stocks that do not change wildly with market changes.
3. Spread your money across different types of investments. By doing this, if one sector does not perform well, others can balance your overall returns, reducing the risk of losing money.
4. Get information about the companies you are investing in and the overall market trend. Understanding what is happening in the market can help you make better decisions and avoid unexpected losses.
Main Point:
With a good understanding of how to invest in the share market online, the next step is to open a demat account with a broker of your choice. Follow the given steps to start your investment journey.When you start investing, keep in mind the key factors to guide you in choosing the right stocks for a more successful portfolio.
Do you have to open a new account to invest in the share market?
Opening a demat account is mandatory to invest in the stock market. If you already have a demat account, you do not need a new account to invest in the share market.
What documents are required to invest in share market?
The documents required to open a demat account are your PAN and Aadhar card along with your bank details.