A share market is a place where stocks of public listed companies are issued, bought, and sold. Stocks, also known as equities, mean having ownership in a company or buying a small portion of the business of that particular company, where you are putting your money.
Basically, you are buying a small portion of a company.
Share Market shares of multiple companies, listed on a Stock exchange, are traded. In history, stocks are the highest return paying investment. Thus, Jeff Bezos, Elon Musk, Tata, Ambani, and Adani are the richest people in the world, as they are the major stakeholders in their companies.
On the Indian Stock exchange, more than 5000 companies are listed.
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How Stock trading started.?
During the 1600th century, British, French, and Dutch governments provided charters to multiple companies including East India. In those days all goods brought back from the East were transported by sea which, always involved a lot of risks. Voyages and ships were often threatened by severe storms and pirates. In order to reduce these risks, ship owners regularly suggested investors offer financing collateral for a trip. In return, if the ship loaded with goods for sale was back successfully, investors received a portion of the monetary returns. And this way the stock trading made its very first way.
Types of Share Market.
The share market has two types. Primary Market, Secondary Market.
Now, If that company is selling its shares for the first time, it is called “Initial public offering (IPO)”. Where a company gets registered to sell a certain amount of shares and raise funds to grow its business is called Primary Market. You also name it getting listed in a stock exchange.
Now, If that company is selling its shares for the first time, it is called “Initial public offering (IPO)”.
What is an IPO.?
IPO is listing a company on the stock exchange for the first time to raise capital from stock investors and traders.
After an IPO trading stocks in the share market like buying and selling shares regularly in the market is called the secondary market. After an IPO, trade-in that particular company will be started, and common people can buy and sell that stock.
Why invest in the Share Market.?
We invest in stocks and hold them so that our wealth can be multiplied and grow and we can be financially free and get rich. It means, we are putting our money, not in the bank, FD, but we are purchasing a small piece of a company.
If that particular company grows and makes a profit, our wealth will be multiplied by that company. Additionally, that company will be sharing the profit with us as well.
While some people consider the stock investment to be risky, especially Indians, many researchers have proven that investing your money in the right stock and holding it for a long period of time (five to 10 years) can provide inflation-beating returns — and be a better investment option than any other investment including, FD, real estate and gold.
People also have short-term strategies while investing in share markets. While Stocks can be volatile in short term, investing in the right stock can help traders make quick profits.
How does Stock Market work.?
The concept, how the share market works is pretty simple. Stock is being traded, which is bought and sold on a bid that is offered by the buyer and seller. And on a mutual understanding, it is credited/debited into your Demat Account. India’s main stock exchanges are the Bombay Stock Exchange and the National Stock Exchange.
The stock market works through a network of exchanges. India’s main stock exchanges are the Bombay Stock Exchange and the National Stock Exchange. Listed Companies issue their stock on these exchanges through a process called an initial public offering, or IPO.
These shares are then purchased by Investors and this way companies raise money.
Funds raised through an IPO or stock sale are used to grow its business. Investors can then buy and sell these stocks among themselves, and the exchange tracks the supply and demand of each listed stock.