Every person works hard to make his life better and earns money. He keeps some part of his earnings as saving, in order to fulfill the needs of the future.
But the work of Money Saving is incomplete until the saved money is invested properly. Well, there are many options for investment, but the Share Market or Stock Market is also a prime option for investment.
Many people want to invest in the Share Market, but because they do not have the right knowledge about the stock market, either they do not invest in the Share Market or they lose their money. In view of this, Sharing the basic information related to:
What is Stock Market - What are the Stock Markets
Stock Market is the place where Shares, Debentures, Mutual Funds, Derivatives and other securities are bought and sold. Shares are primarily bought and sold through the Stock Exchange, and BSE in India (Bombay Stock Exchange) and NSE (National Stock Exchange) are two main stock exchanges.
What is Shares - What are stocks?
Share means - "share" and "stock" in the stock market language - "share in companies". When you buy shares of a company, you become the shareholder of the company. For example, if a company issues a total of 1 lakh shares and you have purchased 10 thousand shares from it, you become a 10% shareholder of that company. You can sell these shares in the stock market whenever you want.
How does the stock market work? How Share Market Works
How do companies issue issues?
First of all, companies bring the IPO (Initial Public Offering) by listing their shares in the stock exchanges and issue their public on the price determined by their own shares. Once IPO is completed, the shares come into the market and are bought and sold by investors through stock exchanges and brokers.
Other Securities to Trade in Stock Market
Most people think that only the shares are bought and sold in the stock market, but it is not like shares, there are many other securities which are bought and sold in the stock market:
Bond / Debentures
Bond / Debenture is like a loan in a way. When a company requires money for a project or they can take a loan from the bank or they take loans from the public / investors and issue the Bonds / Debentures to the public, whose repayment they have to do in the due time. Companies pay interest from the fixed rate on Bonds / Debentures and repayment instead of bonds upon completion of the term of the bond.
Bonds / Debenture For any investor, there is a Secure Investment Option as compared to Shares because it is given from time to time at the rate fixed by the company and repayment is done on Maturity (the term of the bond).
Mutual Funds
Mutual funds are indirect investments in one kind of shares and bonds. A mutual fund is a type of institution or trust that releases its units (like Shares), which people invest in mutual funds. The Mutual Manager of Mutual Funds invested in the Mutual Fund invested in various types of Shares and other securities based on their knowledge, experience, understanding and analysis.
This benefit of investment in mutual funds would be that the Professional Fund Manager of Mutual Fund tries to invest the best of all the collected funds based on their knowledge, in return for which they charge some fees.
Investments in the Mutual Fund are beneficial for those who do not have much knowledge about the stock market or they do not have enough time to see the full information before investing in the stock, so they invest in mutual funds and the mutual fund According to efficiency, further invest in the stock market and other securities. Any dividend received by the Mutual Fund is distributed to the investors based on the units bought on them.
SIP - Systematic Investment Plan
SIP means - Systematic Investment Plan | SIP is a way to invest in mutual funds. Instead of investing a lump sum, every month a fixed amount is invested in the Mutual Fund. The investor's bank account is linked to the SIP Scheme, which transfers a fixed amount from the bank account to the mutual fund every month and equal amount of mutual fund units come to the investor's account. Due to being simple and automatic, SIP is very popular nowadays.
If you like this post please upvote and comment.