WHAT IS STOCK MARKET?Why we should invest money in stock market?

WHAT IS STOCK MARKET??

                               

Stock = Partial ownership of company.

Let us know complete details about stock market:

Let us assume a XYZ cement Company want to increase its exports to extend business in the market. To increase its exports the XYZ cement Company has two ways. The Company should expand its present factory or it should build a new factory. To expand or build a factory it required some money. You may get idea that they can take bank loan. 

But if they take bank loan they have to pay more interest to the bank and it is not that much easy to get Bank Loan .To avoid all these conditions the company will place it shares in the stock market /share market. 

From these shares the company will get money to extend its business in the market. Suppose if the company got loss after investing the company does not have any loss but the share holders means the people who bought the shares the will be loss that’s why many companies choose this path and that’s why stock market is so dangerous.

How the share value fix by the company??

Suppose the Company required One LAKH money to expand their business in the market. Then the Company will fix some amount of shares it may be hundred, thousand or ten thousand. I AM taking ten thousand as example. To get each Share Price total money the company required divided by ten thousand then we will get price of each share.

100000/10000 =10. This 10 will be the price of each share. In this way they will fix share price.

Why we should invest money in stock market??

Because of Inflation .You may get Doubt about Inflation.

Inflation: Day by day the value of money is decreasing. The products which we buy with 100 rupees the same products after two years we need buy with 150 rupees. This is called inflation. It means the person who is rich now after few years he/she becomes poor due to inflation. Every year the inflation percentage is increasing. To over Come this condition we should invest in stock market.

IS THERE ANY RESOURCES OTHER THAN STOCK MARKET??

Yes,

Savings account, fixed deposit, gold, property & real estate.

# IN savings account we will have low risk but we Can Not overcome inflation because we less money (5%).

# IN Fixed deposit also same process as savings account.

# IN gold we will have risk and we don’t know at which it will increase or decrease.

# IN property & Real estate IT will be good but it required huge capital (money). It will be difficult be middle class families. Compare to all these stock market is the best way.

Three lessons need know before investing??

Before investing we need to know three lessons

RISK                         RETURNS                         TIME

The person should know is there any risk and how much returns we will get after investing and how much time is taking to get returns. If he/she is perfect with all these three lessons he can grow quickly compare to others.

Share market:

We have two share markets.

1. Bombay stock exchange [BSE]

2. National stock exchange [NSE]

The Companies which we have in Bombay stock exchange the same Companies will include in national stock exchange like the products which we have in Amazon and Flip-kart. Both BSE and NSE are available in online platform. We have total 6000 companies in BSE and the companies will measure in points. 

The name of those points is called SENSEX. It started from 100 points it means 100 is the starting point. Top 30 Companies will include in SENSEX list (The companies in the list are from all categories like bank, it etc). We have 4000 Companies in BSE. It is also measures in points. The name of those points is Nifty. It means national fifty we get points about 50 Companies. IT started with 1000 points.

* The people who are investing in stock market they have only digital ownership not physical ownership. It means he/she not have any action behalf of the Company .The person who holds more shares he will have right to take decision.

Stock market runs in a week from Monday to Friday and the opening time is 9:15 AM and the closing time is 3:30 PM.

              "     2. 1100

             1. 1000          3.1050

                                      "

1000 is the opening point and 1100 is the highest point and 1050 is the closing point and least point. It is the sample graph of the share for your clarity.

What are the three accounts we need to have Before Investing in stock market??

Savings-account, Trading-account, De mat-account

Savings account means to buy a share we required money that money will be debited from this savings account.

 IN Trading account we can see all the transactions and details about the share. 

De mat account is required to buy or sell a share it act as brokerage.

What are the two types of trading??

* Intra trading.

* Long term trading.

Intra trading means the Person who buys and Sell the share in the same day.

Long term trading means the Person who buys share and Sell the share after two years.

My Suggestion is to invest in long term trading.

Top rules every trader should know:

MIND                   METHOD                 MONEY

Your mindset should be good. Think big and make your own strategy. Invest with less money until you get clarity about stock market.

My suggestions:

Before investing money get clarity about it and there are few apps which allow to Make free trail how to buy a share or sell a share. By this free trail make your own strategy. Start with less Amount .Your mind should be mentally fit. It is risky be careful with it. If you are getting clarity about stock invest in mutual funds. These mutual funds will invest our money in good companies we will have very low risk.

Still if you have any doubt Comment me in the comment 

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Done by: venkat