What is a share market?
Share market is the marketplace where you meet buyers and sellers for trading in shares and stocks. Companies contact the share market start selling their shares and the market issues the shares for trading.
What are stocks?
You use the word ‘shares’ when referring to ownership certificates of a particular company. The word ‘stocks’ is used when you refer to ownership certificates of any company.
Why do companies offer their shares in the market?
Companies offer their shares in the market to raise money to fulfill their various goals such as company expansion, purchase of new machinery, etc. The money spent by the shareholders will be used to build the company’s business.
How would you choose stock for your portfolio?
With so many options available, picking the right stock for your portfolio can be a challenge. The basic rule while buying stock is to keep your financial goals in mind. Some may look for growth, while some may look for dividend income. The next logical step is to conduct a stock research. Look at the company’s income statement, cash flow statement, balance sheet, management’s future plans, debt figures, etc. Once you’ve accumulated the facts, analyse the data. If the EPS (earnings per share) is good, it means that the company is making profit on a per-share basis. The market appreciates stocks which show a growth trend of EPS. You can also use a screener to narrow down the list of stocks based on any criteria like industry or sector. Avoid small-cap companies and go in for mid-cap and large-cap ones. You can also conduct a technical analysis using the tools and charts available online. If you still need guidance, approach a stockbroker like Angel Broking who will guide you to pick the best stocks.
Where do I find stock-related information?
You will find most of the information you need on the broker’s trading site. The trading interface on the brokers’ site provides real-time stock quotes through charts. It also contains a wealth of information about the latest stock market trends so that you can make a more informed decision while trading. The online interface also displays a list of top-performing stocks, information on gross profit and loss, dividends, shareholder benefits, etc. Moreover, you will also find stock information of your buy/sell transactions on the broker’s trading site. It provides research tools and technical analysis, helping you to build your financial future on this wealth of information.
From where do I buy stocks?
You can buy stocks either through a broker’s online platform or directly from a company through direct stock purchase plans (DSPP), though few companies have the option of DSPPs. An investor can open an account by depositing either stocks or cash in a brokerage account. You can choose between a full-service broker and a discount broker. A full-service broker offers expert advice and manages your account, but their services come at a high cost. Discount brokers, on the other hand, are cheaper but offer little individual attention. If you wish to trade on your own through the internet, make sure you are well-versed with the terminologies and the working of the stock market. Make the right choice of stocks based on your financial goals and use the trading strategy which is best-suited to meet those goals.
What are equity shares and why are they issued?
An equity share represents the form of fractional or part ownership in which a shareholder, as a fractional owner, undertakes the maximum entrepreneurial risk associated with a business venture. The holders of such shares are members of the company & have voting rights.
What you need to do to buy shares in India?
Beginners to investing in stocks markets in India first need to contact one of the brokers, who are members of one of the stock exchanges in the country, and there are plenty of them. They would help you fill a form and would need passport size photographs, address proof and also ID proof. They would then proceed to open two types of accounts; one is a trading account and the second is a demat account. A trading account is meant to buy and sell shares, while a demat account is meant to hold your shares.
What is this demat account?
Demat account is just similar and is an account to hold your shares in the electronic form. Each time you sell shares they are debited from your account and each time you buy shares they are credited to your demat account. If you sell shares they are debited from your demat account and the bank account is credited. Each time you buy shares, you have to pay and the bank account is debited and the demat account is credited with the shares bought.
What are Stock/ Equity Market?
The stock market is made up of exchanges, like the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Stocks are listed on a specific exchange, which brings buyers and sellers together and acts as a market for the shares of those stocks. The exchange tracks the supply and demand and directly related the price of each stock.
What Makes Stock Prices Go Up and Down?
Share prices like any other commodity largely move on the basis of demand and supply. Higher is the demand, the greater would be the movement of the shares on the higher side. On the other hand, if there is a huge selling pressure, the prices would be lower. There are many factors that determine whether stock prices rise or fall. These include Company performance, the media, the opinions of well-known investors, political and social unrest, risk, supply and demand, and the lack of or abundance of suitable alternatives. The compilation of these factors creates a certain type of sentiment (i.e. bullish and bearish) and a corresponding number of buyers and sellers. If there are more sellers than buyers, stock prices will tend to fall. On the other hand, when there are more buyers than sellers, stock prices tend to rise.
What are the benefits of buying equity shares?
Unlike bank deposits, which give you only interest rates, equity shares offer you plenty. As a shareholder you receive dividends, bonus and rights shares. But, the biggest benefit is the capital appreciation that you get from shares. For example, if you buy a share at Rs 100 and it goes higher to Rs 110, you can sell the same at a profit of Rs 10. So, in short the benefits are plenty.