What is Stock Market and how to make money with it?
In today's competitive world, everyone wants to be rich. People also work day and night for this. People also save part of their earnings. But that's not enough to become rich. If we want to secure our future, we also have to investments some places. Like stock market, share marketing, mutual fund etc. In this post, we will go to what is the stock market and how does it earn?
Stock Market
You can benefit a lot if you invest money properly in stock market. But, if you invest money in the market without thinking, it can also be a loss-making deal for you.
That's why you need to know these markets properly. Today, in this article, we will give you information about the stock market so that you can understand it very well.
What is the stock market and how did it make money?
Let's know what the stock market is, what is the stock market,
subject list
What is stock market?
Share market, stock market or equity market it is all the same, so don't be confused. This is the market where you can buy or sell shares of a company.
Buying shares means you are buying a few per cent ownership of that company. That means after buying the stock, you become the owner of a few per cent of the company.
Now, if the company profits, you will also have to, and if that company loses, you will also suffer. Understand with an extremely easy example.
Suppose you are planning to open a startup, you have Rs. 10,000, but you will not work for that Rs. 10,000. So you asked a friend to invest Rs. 10,000 in your startup.
That is, 10,000 of your shares and 10,000 of your friend's share. Now both of you friends have become honors of 50-50 companies. Any profit or loss in the future will be equal share between you two friends.
This is what happens on a large scale in the stock market. Where a company can sell its shares to anyone all over the world.
History of stock/stock market
The market was launched about 400 years ago. Netherlands's Dutch east India company first launched the concept of the stock market. In fact, trading was then through ships.
At the same time, not all countries could be discovered. In that case, the company used to send its ships for trading through the seas. These ships did not carry any one person's money.
So the Dutch East India Company had appealed to the people to invest money in these ships and told people that when trading through these ships is profitable, you will also be shared with you as per the money you have invested.
However, it was risky to do so at that time because most of the ships did not return. That is why it was decided that people should multiple investment now.
That is, a person should invest money in 5-6 ships not in a ship so that profits are expected from one ship. Similarly, stock markets started forming and people started investing their money in many places.
The place from where the ships used to leave for trading has now started bid system. Gradually, the ship's money was needed, and people began to get profits.
The concept of the stock market, which started from there, became very popular. Today, every country is dependent on the stock market. Every company has its own stock exchange. Let's understand stock exchange.
Stock exchange
Stock exchange is where people buy and sell shares of the company. The market is divided into two parts.
1.Primary Market
2.Secondary Market
Companies sell their shares in the primary market. The value of their shares depends on demand. That is, if the demand for products of a company is high and the company sells its shares, their value will be higher.
How many shares can a company have?
The important thing to keep in mind is that every share of the company has the same value. A company can share any number of its shares among the people but all of them will have the same value.
Suppose a company is worth Rs 1 lakh and wants to sell its 1 lakh shares and the company can also keep the price of each share at Rs 1 or make 2 lakh shares for 50 paise.
In addition, it should be noted that no company ever sells its entire shares. The company always holds more shares and sells only a few shares outside to maintain its ownership.
The one who has more shares makes decisions for the company. For example, Facebook founder Mark Zuckerberg owns 60 per cent of the company's shares and 40 per cent of the shares are with others. In that case, only Mark Zuckerberg can take all the decisions.
Let's now understand the secondary market
In the secondary market, people who have purchased shares of a company can go out and sell the shares. Like you buy 10 per cent shares of a company.
You can go out and sell five per cent of your shares. This market is a secondary market. Now it is up to you whether you are selling those shares for more money or less money depending on the demand.
Stock Exchange of India
There are two big stock exchange companies in India.
Bombay Stock Exchange - There are about 5400 registered companies.
Companies have nifty and sensex to measure the price.
How does the company sell its shares?
If a company wants to sell its shares through a stock exchange, it is called public listing. For this, SEBI i.e. SECURITIES AND EXCHANGE BOARD OF INDIA was constituted.
This institution decides whether your company should have a public listing or not. It is only after all its norms are completed that a company is able to sell its shares among the people.
If a company is not in demand in the market, SEBI removes it from the public listing list.
How to Buy Shares?
Earlier, the process of buying shares was a little different, but nowadays you need three accounts in the internet.
Bank account
Trading Account
Demat (DEMAT) Account
Stocks purchased in demat account are stored in digital form. That is why demat account shares are very important in the market. Those who buy shares in the market are called retail investors (RETAIL INVESTOR).
The retail investor always needs a broker.
What is a broker?
The broker mixes both buyers and sellers. Just as you resort to a broker when you take a property. Nowadays many apps have been created as brokers.
Even your bank can play the role of a broker. When you invest money in the market through a broker, you have to pay some of it as a broken fee.
This amount ranges between 0.5 and 1%. In such a situation, when you invest money in the long term, you lose a broken fee.
Is the stock market a loss-making deal?
No, it is not necessary that you will lose in the stock market. If you buy shares of a company thoughtfully, you can also benefit a lot.
For example, you have purchased 1,000 shares of a company for a price of Rs. 1. Now that the price of those shares has gone up in demand and you sold it for Rs. 2, you got a profit of Rs. 1,000.
How does Stock Market earn?
How to make money from the stock market? This is an important topic. Discretion, understanding and strategy are essential for making money in the stock market. Moreover, you should have patience, that is, patience.
Let's tell you some of the key mantras of success in the stock market so that you can make big profits.
1. Complete your homework
This means that whenever you plan to invest in a company, first study the company well. Look at the demand in the market of that company.
Suppose the summer season is coming, coolers and ACs are in great demand. So invest in a company that sells these products and whose products are in demand. So you may make profits.
2. Share in Business
Never invest in the price of shares but invest in business. The best example of this is that Warren Buffet invested $1 billion in Coca-Cola in 1988. In return, he received a return from the company at 10 per cent for 10 years.
3. Do not get into the words of others
By means of this, I mean to avoid sheep.' Don't invest in anyone's words. Study well first. You can consult an expert.
4. Always invest extra money
This is the best rule to make profits in the stock market. Always invest your extra funds i.e. money you don't want in the short term. Sometimes the value decreases and we sell our shares for less money because of the need for money. Never do that.
5. Keep an eye on the market
Just investing and waiting for profits is not the right step. You need to keep an eye on the market. Note when the shares are falling, when they are bouncing. Read the newspaper, watch TV channels so that you can take care of your shares.
Conclusion
Friends, Through my article, I have tried to convince you all about the stock market in a very simple language. So that you avoid making investments in the wrong place.
This article covers all topics like what is the stock market, history, how to make investments. At the same time, we have mentioned some market terms to make it easier for you to understand.
Hi , This is Pramod Choudhary from Nagaur Rajasthan India. I an student and I would like to share my positive thinking with everyone that's my passion . Thank you
Please don't enter any spam link. ConversionConversion EmoticonEmoticon