Share market is the type of the investment where you will get high returns. As here is high returns there will be high risk. So you have to understand some terms in it.
Share market is the place where buying and selling of shares take. If you buy the shares in exchange you will get the minute partnership of the company.If you sell the shares you will get the money which may be profitable or may be loss.Share market finds the buyer for seller and seller for buyer. There are two stock exchange companies where the companies get listed to sell the or shares.
Bombay stock exchange:
Here top 30 companies of different sector get listed. This 30 companies shows the index that is sensex means sensitive index.
National stock exchange:
Here top 50 companies of different sector get listed which shows Nifty index.
How share market work
You should know this-
- When you buy the share then it directly goes to your depositary A/c.
- Depositary are in the two forms I..e… NSDL and CSDL.
- Depositary charge is paid by the seller because his share is transferred from his depositary a/c to buyers depositary A/c
- Depositary participant is most of the banks or stockbrokers.
- They act as an agent of NSDL and CSDL.
- You cannot interact with NSDL or CSDL.
- National Security Clearing Corporation and Indian Clearing Corporation these are the two clearinghouse.
- After buying and selling the shares it helps to debit or credit the cash from a/c and also to clear the from the respecive the a/c.It doesn’t make any default.
Beats the inflation.
Can invest from minimum amount.
More convenient to invest.
Need more time to learn.
Market is not predictable.
Practical investment :
Investing in stock market is very simple as you can invest through your mobile also. But it requires more research. Download the trading app-open the demat a/c-search the stock – select how much – and buy. For beginner u can start just by grow. And for advance u can do it by zerodha, upstroke etc.
Ways to buy shares
For buying you have to open d-mat a/c and trading a/c. If there is no trading a/c then it can’t hold the shares. As there are two methods of buying share Primary market-IPO. Secondary market – NSE/BSE. And trade with NSE/BSE you have to find first broker.As you can buy it from zerodha. At current period there many APO where u can buy and sell the shares. Such as zerodha, grow etc.
Here average you can earn is 15-16% As if you hold the right stock for longer time you can earn 20% return also. As the stock market can give huge loss or huge profit as it is risky market so it gives higher interest.
- Regulatory risk :
Means regulatory of any industry has announced new policy or made any changes then it affects the market so there is regulatory risk.
- Business risk :
If the Business faces any loss or facing any type of problem then it get affected.
- Market risk :
As market is very sensible so any change in market get affected.
Demand and supply
If the supply of the share gets low then the price of share gets high.no If the supply of the shares gets high then the price for that share gets low. As demand and supply depend upon various information such as an annual report, press readers, market buzz, quarterly earnings, News stories, court case, news stories, social network. The price of share gets affected for the long term and also for the short term.
Earnings future growth, management team & governance, competitive advantage, expansion plans, debt position, promoter share pledging. This factor affects the share price of the company in the long term.
- Liquidity of share
- Positive and negative news
- Charts and patterns
- If any delivery is more than share purchase for long term
- If the volume is more then the share price will rise
- If Market is overpriced and under-priced.
This all factors get affected for the short term period.
3.Macro and macroeconomic
- Government policies.
- Overall economy.
- World economy.
- Inflation.. if inflation is low then stock price high
- Human sentiments:- different people have different information and a different reaction.
Study before choosing shares:
Fundamental study and technical study. Fundamental study is helpful for long term investment and technical study is helpful for short term investment. Check details about companies in such way:
Past profits and debts.
As the shares are buy when the market falls and sell when the market get rise.You can manage your risk by apply stop-loss.
The fact is share market is risky market if you are going to invest then you have to have a deep study in it.