The stock market refers to markets that provide the facilities of issuing, buying and selling stocks on a stock exchange. Stocks, sometimes called equities, are fractional ownership of a company help by an individual or a company. Stock markets exist to fulfill two purposes – to allow companies the ability to quickly access capital from the public and to provide facility trading stocks to a regular individuals/companies. Stocks are traded over a stock exchange. A stock exchange is an organised financial market that is designed to provide the facility of buying and selling shares, where the monetary value of the shares is determined by the current demand and supply. Some of the major stock exchanges in India are:
- Bombay Stock Exchange (BSE) in Mumbai, Maharashtra
- National Stock Exchange of India (NSE) in Mumbai, Maharashtra.
- Calcutta Stock Exchange in Kolkata, West Bengal.
Tips For Investing In Stock Market
Everyone is searching for quick and easy ways to become rich. Some people do so by winning a lottery. But wining a lottery is a game of luck. Therefore relying solely on luck to make money on stock market would be the worst strategy and only the individuals with no knowledge on stocks would follow such methods. In reality, the stock market is a very sophisticated market that can make or break our fortune. The truth is, a lot of people get rich by investing in the stock market while at the same time hundreds of thousands of people lose they last penny in the process. However, making money in stock market is not the most difficult thing on this planet. Here are Some tips for investing in stock market:
Don’t be too quick to invest
One of the most common mistakes newbies make is that they invest too quickly without having sufficient knowledge/expertise hoping to see their investment grow 50% the next month. Do your due diligence before investing. One thing we need to understand is that stock market isn’t a get rick quick scheme. Depending on the stocks, it takes months (sometimes years) to see a significant return on investment. Therefore, patience is necessary to be able to make money in stock market.
Understand the risks
Investing in stock market can be highly rewarding if you have sufficient knowledge and expertise. At the same time, it can also be the perfect recipe for disaster. You could lose all your investment capital in a matter of months. It is important to realize your goals first before making the first move in stock market. Maybe you want to invest your retirement fund so you can live off of the interest generated from your investment or maybe you just want to invest so you sustain your life. Ask yourself the following questions:
Do you have adequate knowledge on stock market?
Are you willing to take the risk of losing a significant portion or all of your investment capital?
Can You patiently wait for months (possibly years) before you investment yield a good chunk of money?
If the answer to all the above question is “Yes”, then you should definitely consider investing otherwise consider putting your money somewhere else.