WHAT IS SHARE MARKET?

Legend has it that the day you start earning, you should start investing as well. Nobody wants to be reliant on a single source of income. However, the question of where and how to invest emerges. If you ask your grandmothers and elders this question, the first and only response they will give you is FDs, a zero-risk investment tool. But recall the movie ‘Scam 1992’ statement, Risk Hai to Ishq Hai (Where there is risk, there is love); that is the mindset we must have if we are to thrive in this ultra-competitive society. And the stock market is the best place to make money if you take calculated and educated risks.

The definition of share market will now be simple and intriguing for you to grasp.

A share market is a public institution that allows people to trade shares (stocks) and derivatives at a set price; these are securities that are listed on a stock exchange and can be privately traded. The primary role of the share market is to serve as a source of financing for companies.

WHO CAN OPT FOR SHARE MARKET?

Gone are the days when the stock market was seen to be something only a clever man could deal with. Nowadays, the stock market is open to all. Anyone with sensible knowledge is welcome to enter the market and reap the benefits of the system. Anyone can trade on the stock exchange. It is a life skill that must be cultivated, and it, like all good things, necessitates patience, time, and study. By making appropriate investments, you can make your money work for you and achieve your goals and ambitions.

HOW DOES SHARE MARKET WORK?

Companies that seek to grow their operations can use the stock market. A stock exchange is a location where firms’ stocks are listed. These mentioned equities are available for purchase by investors. The ownership of a firm is sold to investors in the form of stocks/shares in the stock market. Individual stocks signify ownership in a corporation that has been broken into smaller parts. These little units are known as stocks, and they may be purchased and sold on the stock exchange. The stock market serves as a conduit between firms and investors.

The money earned by firms via the sale of their stocks is referred to as their accumulated capital. Companies employ this accumulated money to grow or modernize their present operations.

IS IT TRUE THAT INVESTING IN THE STOCK MARKET IS AKIN TO GAMBLING?

Recall the line about Risk in first paragraph. For the vast majority of individuals, the share market is identical to gambling. People believe that investing in stocks is as simple as “buying cheap and selling high.” People are unconcerned with why a stock’s price is growing or decreasing. In essence, however, the stock market functions far more logically than a game of chance. It is based only on business reasoning. The stock market may be anticipated quite accurately if properly practiced. As a result, it is not gambling.

However, many people do not want to go through the trouble of comprehending the logic of the stock market. For them, “buying low and selling high” is synonymous with “knowing enough.”If you ask your parents about the stock market, they would most likely advise you to avoid it. The reason for this is that they have been approaching the stock market as if it were a pure gambling phenomenon. People believe that the stock market may either quadruple or eat away everything in a single day. However, investing in the stock market is not something that can be done in a matter of days, weeks, or months. It is critical to remain involved for many years.

Understand, the stock market is not a good place to put your money in the near term. Day trading in stocks is not the same as investing. If one truly wants to gain money in the stock market, they must maintain a holding period of at least five years.

FINAL WORDS- THE STOCK MARKET IS A ONE STEP SOLUTION!

How would corporations have raised cash if there was no stock market? What would the world have thought of investors like Warren Buffett and Peter Lynch? If you want to acquire stocks, you have to contact individual firms and ask for their stock. Similarly, selling stocks would be significantly more difficult. Where will you locate buyers for your stocks? The stock market is a comprehensive answer.

The stock market functions similarly to a shopping mall, where shares of all firms are purchased and sold. It’s similar to how we choose to go to a shopping mall to buy groceries, veggies, clothes, electronics, entertainment, eating, and so on. How tough it was in the past when one had to go to each separate store to purchase each item. As a result, a stock exchange is a one-stop destination where one may purchase and sell stocks from any company.