What is stock market ?

• What is stock market ?

Share market is a very big concept, to understand it we have to first understand how share market works, so let's learn.

Share market is also called share market, in share market we buy shares through broker. Brokers are an important part in buying and selling shares, without a broker we can neither enter the stock market nor trade in shares. This process is done through both offline and online medium, very few people use offline medium today.

          It is spread all over the world,

Today, the population of USA is 345,588,880, which is the third most populous city in the world, out of which 55% of the people of USA invest in the stock market, which comes on top in the world.

Let us know the history of stock market,

The stock market came to India about 400 to 450 years ago, at that time the British rule was in force in India, at that time there used to be a company named 'North East India', which used to trade with ships. In which sometimes due to change in weather, the ship got damaged and the goods kept in the ships were damaged and due to the damage of the goods, there was a lot of damage and the reconstruction of the ships also cost a lot. But, the company had to bear the cost as the company started taking money from the people, so that the North East India Company did not have to pay the full cost as the cost was shared among the people and in return the company promised that we would ship the ships. There will be people in This was the first investment made by the people of that era.

Then this process continued continuously, which we know today as the stock market. In which today people from all over the world invest, due to which they make considerable wealth. In India also about 4% of the people trade in the stock market, while India ranks first in the population rate of the world, and America comes first in trading, while America's population is a quarter of India's.

• in case of company, How does the stock market work ?

When a new company has come in the market with a new idea, a company will need investors to invest in the company for the development of the company, so the company is offering some of its shares to investors for the sale of shares, investors can buy are shares but only in case they have to accept the offer which is offered by the company in the form of equity and preference shares. The founder of the company did not sell all his shares holding 51% and above to show as the owner of a company, and his decision-making power influence was difficult among the shareholders with the maximum number of shares, and the shares of a company will be sold to the shareholders.

Let's see step by step, in case of company how does the stock market work?

1. Listing the stock exchange:

The Company sold their shares on stock exchange but company has must required to listing on any stock exchange for e.g. NSE (National stock exchange) or BSE (Bombay stock exchange).

2. Establishment of IPO (Initial public offer): 

The company brings IPO to sell its shares to the public. After selling the shares, the company collects the money, which is used to pay for company departments, invest or buy any assets. The company offers shares to the public for the first time through market experts, investment bankers etc. The public buys shares with an initial price that is estimated by investment bankers.

3. Ownership of company: 

The ownership of a company is divided into shares. The shareholders and investors purchase the shares of a company in from of equity and preferences shares and become the owner of a company. 

4. Trading on stock market: 

After the listing of shares in stock market traders can buy and sale the shares in secondary market. When shares price is low then a trades should buy the shares and after getting high price of shares trades should sale the shares for gaining more profits. 

5. Stock Price Fluctuation: 

There are many issues for fluctuating prices of shares like environmental issues, crisis, unstable economy, Performance of companies and demand or supply of shares, due to this causes what might be the value of shares is dependent. fluctuations of shares price is risk and advantage for investors and shareholders. 

• How to invest in stock market ?

To invest in stock market we have to knowledge about stock market. Stock market isn't easy it is very complex. also you need a good reason for why you enter in stock market? there may be so many reasons to enter in stock market such as you think about your future, for making good wealth, or for gaining more profit in stock market. Many people's wanted to make a good wealth through stock market but it isn't a easy, they have must required calm, patience and knowledge to become a king of stock market but, many people don't have these they do mistake in selecting wrong shares or wrong company for invest their money, and also they don't know when should buy the shares and when should sold it, that's why they victim by own and lost their money. 

Here are the steps on how to invest money in the stock market,

1. Set a financial goal: To invest in share market you must first decide your goal, are you saving for your retirement or you want to create good wealth in future or you want pay any loan, it will be considered for long term and short term investment or it is also depends on age. Once your goals are set, then you can take action  to achieve them. 

2. Do Research: Research is one of the main points for investing in the stock market, without adequate information you cannot make a better choice, you must have your own research, for help you can consult an advisor, an experts, an experienced investor or a broker. They can guide you properly as per your wish.

3. Choose a Broker Firm: Broker plays an important role between the company and the public, you cannot directly invest in any company, to trade or invest you must choose a broker who will invest in any company through you can do.

4. Open Demat Account: After selecting the broker you need to open a Demat account. It is very important for trading and investing in the stock market, it can open either offline or online. PAN card, Aadhaar card and some personal details are required to open a Demat account, for more details you can consult your broker.

5. Add Bank: After completion of KYC add your bank account from which bank you can do an invest? Then add money, how much can you invest?

6. Buy Stocks: Once you have a demat account, you can buy ETFs (Exchange Traded Funds) or invest in any mutual fund. ETFs and Mutual Funds are the basket of stock exchange which are managed by professionals or any expert. It is best for beginner investors who do not have advance knowledge. Hold your stock for long time to avail best returns, stock market is very fickle its graph keeps on going up and down every minute.

• Types of investment

1. Mutual Fund investment: Mutual Fund is a basket of stock exchange which is managed by experts, it is a long term investment. Investors invest periodically in mutual funds.

2. Stocks: Shares are considered as ownership of the company, if a person buys shares of a company, they fundamentally buy the ownership of that company, they have the right to participate in any meeting or take any decision.

3. Bonds: Bonds are loans that you owe to a company or government for a long or short term. Bonds are helpful for beginners as they are very safe to invest but offer very low interest.

4. Exchange Traded Fund (ETF): An ETF is similar to a mutual fund, but it is traded on a stock exchange like a stock, which is more flexible if you want your money quickly.

5. Fixed Deposit: Fixed Deposit is a deposit system provided by banks and non-bank financial institution that allows fixed term deposits with fixed interest, Fixed Deposit interest is essentially higher than Savings A/c.

8. Real estate: Real estate is great for building solid wealth, but it's also a liquid asset, so it's very difficult to sell quickly, especially when you need the money.

9. Commodities: Commodities like oil, gold, wheat etc. It is a fickle investments but it gives better returns.

• Key Points: 

      1. Do your own research before investing in any stock exchange .
      

      2. Get help of your experts or any adviser.
      

      3. While investing in any company, check the financial status of that company like P.E. Growth, company's debt, whether it is able to pay or not, check last year's share prices and compare with current price, is it a good time to invest or not etc.

      4. Don't be panic while loss.

      5. Make safe investments like mutual funds, fixed deposits, gold to bear less loss.