BASIC SHARE MARKETING FOR BEGINNERS
Share market is now getting famous among many people. Everyone wants to invest their money in the share market. Most of you have heard about many people who invest their money and they become very successful. The attraction is very high and the way people invest money is increasing the popularity of the share market. the scope of the financial market in India is very bright. The market is running on a simple equation (Risk = profit). Share market is all about those people who have experience, knowledge of the current scenario, and better prediction of future value. If you are a beginner then it’s ok you just need to understand the basics of share marketing. After that, you can start investing your money. Firstly, recommend one thing in your mind. In starting you need to invest a small amount.
Meaning of share and market
A share is a part of ownership that is divided by the company into a small equal desired number. The holder of the share is a part of the owner. When a company gets profit they have to distribute the profit between their shareholders.
A market is a place where the buyer or seller meets and fulfills their demand which is related to the share market.
ACCOUNTS IN THE SHARE MARKET
Demat accounts hold shares in the name of the person who buys shares. Generally, every bank provides you with Demat account services and pan cards are necessary for them. In modern times many applications provide you these services very easily free of cost(like Zerodha, groww, etc)
You cannot directly buy shares from companies you need to communicate with through a stockbroker. According to SEBI guidelines, SEBI makes it mandatory that all of the share-related transitions must be done through stockbrokers. The broker is the person who is working as a mediator between the company and you. The stockbrokers are registered with the stock exchange and they work for you. The trading account is open with a stockbroker. All of your purchased shares have been stored in that account.
Money flow in account for share market
For the share market, you need money to invest in shares and this money needs to transit to your trading account. So we have to link a bank account to your trading account. This account will manage your inflow or outflow of money
SHARE MARKET IN DIFFERENT PHASE
Now you understand the basics of how to invest. Let’s come see where to invest your money.
Generally, we have two types of market for investment primary market and secondary market
The primary market is the name of the first phase of every listed company. when a business wants to list their company in the share market. Then all of them need to release their IPO(which means initial public offering). If you invest in an IPO remember one thing. The number of shares allotted to you totally depends on the market. If an IPO is oversubscribed(for example when a business listed their IPO and investors purchase more than the actual then.) then the number of shares you applied will not offer you the same. It’s because of the demand and availability of shares. Once they allot their share to investors within a week. Then companies are listed on the stock exchange now you can trade with them.
This is the main thing when you heard about the share market. All of the investors buy or sell the share and earn a profit. Shares are also sold in the primary market but they are first-time issued. The secondary market is the main market where you can invest your money for the long term or can short sell the shares.
Tips for investment
1. The people who can manage high risk. Investment needs to maintain in ratio to reduce the risk. The ratio of investment is 70% of the money in equity share.10% in gold and 20% of the money should be invested in long term investment shares(like preference share, bajaj, Infosys & HDFC)
2. Some people don’t want any risk in their investment. They just want an annual or monthly return on their investment (like the old age population is not able to play on high risk. They just invest their money for stable returns ). This kind of investor should maintain their ratio of money around 70% in long-term investment. 20% in gold and the remaining ratio is can be invested in equity
3. Mutual funds are also a good option. Some of the companies invest their money in various investment places in the share market. This diversification decreases the risk and you can earn profit. you just have to give a small percentage of your profit to these companies. Mutual funds are risky; all the companies have different parameters of investment. The investor needs to read the document of mutual funds carefully. You need to understand the company’s plan carefully
A share market is a place where people invest their money and earn profit or loss out of their investment. The risk is very high in the share market but you can manage this risk. The experience and knowledge of an investor make the risk affordable. The more you invest in the market then the off-market will give you experience and always try to diversify your investment. It will reduce your losses.