Stock market growth

Basics of Stock Market

What Is Stock Market?

The stock market provides the platform where shares of public companies are traded. There are two exchange markets, BSE and NSE which are both situated in Mumbai.

What Are Shares?

Buying shares of a company is a way to own a piece of business by paying its current price. After buying the shares the investor becomes part-owner of that company and considered a Shareholder or Stockholder. If the company performs well then investors get benefitted from an appreciation in its stock price. Along with it, the company can give some part of its profits in the form of dividends.

What Is IPO?

IPO is simply called an Initial Public Offering. The company brings IPO when it decides to expand. With that money, it can hire more employees or focus on aggressive expansion to capture significant market shares. This year we see amazing IPO’s like Zomato, paras defense, and many more which gives good return. While on the other hand IPO like Paytm turns into a nightmare for investors.

What Are Nifty And Sensex?

Nifty and Sensex are the most popular Indexes in India. They are the benchmark for determining the overall performance of companies.

Nifty –It is popularly called as National Stock Exchange (NSE). It is a collection of the top 50 companies in India. After the Harshad Mehta scam government decided to establish a similar platform like BSE to increase transparency which gave birth to NSE.

Sensex- It is called as Bombay Stock Exchange (BSE) which is the collection of Top 30 companies. It is India’s first exchange market.

How to Invest In Share Market?

Most people prefer to invest in Mutual Fund or invest by themselves. A mutual fund is managed by professionals who can give more returns than the overall market. In return, they charge a commission of around 1%. Various Brokers like Zerodha, Upstox have made investing simple and affordable. Today you don’t need to visit the stock market for buying and selling of stocks nor need you to pay hefty fees to a broker to buy the stock or invest in a mutual fund.

Is There Any Difference Between Share Market And Stock Market?

Yes. When a number of shares are put together, it is called stock. So next time you buy 1 unit of a certain company then call it a share, not stock.

Companies can issue shares not stocks by private placements, right issues, and public issues.

Who Decides The Share Price?

The share price is determined by the Demand and Supply of that share in the market. Suppose if many people want to buy the share of ITC then its demand will rise and subsequently its price will also rise. The price of a stock is also affected by the image of the company in the market.

How much money you will need to invest in the stock market?

 In the Indian stock market, you can buy stock of VI for 10 rupees and MRF for above 70,000 rupees also.

Thanks for reading my blog. Let me know in the comment section which was your first stock and what price range you buy it.

How to learn about the Basics of the Stock market?

Personal Finance Books are the best resource to learn about the basics of the stock market. While the popular course of CA Rachana Ranade called”Basic of a Stock Market” is also the best to start learning about investing

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