Market statistics
What is the Share Market?
The stock market is a place where individuals buy and sell publicly listed shares during designated trading hours. The stock market functions as a platform where individuals buy and sell publicly listed shares during specific trading hours. When you purchase a share, you are acquiring a fraction of ownership in a company. For instance, purchasing 10 shares of ABC company at Rs. 200 each makes you an ABC shareholder, Allowing you to sell ABC shares at any point.
Investing funds in shares represents a stake in the company. This stake carries the potential for share value to rise alongside the company's growth. Consequently, it enables profit upon selling in the market. Stock prices fluctuate due to various reasons, but investing for the long term can help you bounce back from temporary declines.
Types of Share Market
The share market consists of the following types:
Primary Share Market
When a company goes public for the first time, it enters the primary market. The company issues shares to the public, and these shares are traded among market participants.
Secondary Share Market
Once a company's securities are sold in the primary share market, they are traded on the secondary share market. Investors have the ability to purchase and sell shares at the current market rates.
Other types of share markets include:
- Equity market: Where stocks are traded among buyers, typically facilitated by a broker.
- Derivative market: Where trading is conducted using primarily two instruments - the futures contract and the options contract.
Why Invest in the Share Market?
The primary aim of investing in the stock market is to help individuals achieve their future financial goals. Inflationary pressures affect people's ability to earn and save effectively, making investments essential to deal with rising prices. The stock market is favored as an investment platform for several reasons which are explained as follows:
- It provides high liquidity to investors due to consistently high trading volumes.
- In the stock market a wide range of financial instruments such as mutual funds, bonds, shares, derivatives, etc are available.
- Ownership of shares grants investors voting rights and involvement in the strategic decisions of the company.
- Investors have the potential to earn significant returns within shorter time frames.
- Trades are executed digitally, offering convenient opportunities for investors.
Despite the numerous advantages, investors should always be cautious while investing in the stock market. Developing a deep understanding provides you with a solid foundation to start investing in the market.
Frequently Asked Questions
How would you choose a stock for your portfolio?
To choose a stock for your portfolio, conduct thorough research on company fundamentals and industry trends while considering your investment goals and risk tolerance.
Where can I get to see the share market live chart?
You can view live share market charts on financial news websites, trading platforms, or specialized financial apps.
How many shares or stocks should I buy?
The number of shares or stocks to buy depends on factors like your investment capital, risk tolerance, and portfolio diversification goals.
Are there any tax implications on stock market investments?
Yes, buying and selling stocks in India incurs capital gain tax.
What kind of accounts do you need to trade stocks?
To trade stocks, you typically need a brokerage account, which can be opened with various financial institutions or online brokerages.
