If you invest money in the stock market properly then you can make a lot of profit. But at the same time, if you invest money in the market without thinking, then it can also become a loss-making deal for you.
That is why it is important that you have proper knowledge of these markets. Today in this article, we will give you information about the stock market, so that you can understand about it better.
Let us know, what is stock market, what is stock market, stock market kya hota hai, stock market se paise kaise kamaye, stock market se kamai kaise hoti hai And so on.
What is stock market? (What is Stock Market in Hindi)
Share market, stock market or equity market are all the same, so do not get confused. This is the market where you can buy or sell shares of a company.
Buying shares means that you are buying some percentage of ownership of that company. Meaning that after buying the shares, you become the owner of some percentage of the company.
Now if the company will profit then you will also be there and if that company suffers then you will also have to bear the loss. Very easy to understand with an example.
Suppose you are planning to open a startup, you have Rs.10,000 but in that Rs.10,000 you will not do your job. So you asked a friend to invest Rs 10,000 in your startup.
That is, 10,000 your share and 10,000 you friend’s share. Now both of you friends have become the owners of 50-50 company. Any gain or loss in future will be equally shared between both of you friends.
This happens on a large scale in the stock market. Where a company can sell its shares to anyone in the whole world.
History of Stock/Stock Market
This market was started about 400 years ago from today. The Dutch East India Company of Netherlands introduced the concept of share market for the first time. Actually, at that time trading was done through ships.
Also, not all countries could be discovered. In such a situation, the companies used to send their ships for trading through the seas. No one person’s money was used in these ships.
So the Dutch East India Company had appealed to the people to invest money in these ships and told people that when there is profit in trading through these ships, then profit will be shared with you according to the money invested by you.
However, at that time it was too risky to do so as most of the ships did not return. That’s why it was decided that people should make multiple investments now.
That is, one person should invest money in 5-6 ships not in one ship so that profit is expected from any one ship. In this way the stock market started to be formed and people started investing their money in many places.
The place where the ships used to leave for trading, now the bidding system has started. Gradually the need for money for ships started getting fulfilled and people started getting profits.
This concept of stock market, which started from there, became quite popular. Today every country is dependent on the stock market. Every company has its own stock exchange. Let us understand stock exchange.
Stock exchange is the place where people buy and sell shares of the company. The market is divided into two parts.
- Primary Market
- secondary market
Companies sell their shares in the primary market. The value of their shares depends on the demand. That is, if the demand for a company’s products is high and that company sells its shares, then their value will be high.
How many shares can a company have?
The thing to keep in mind is that every share of the company has the same value. A company can distribute its shares among any number of people but their value will be equal.
Suppose a company is worth Rs 1 lakh and wants to sell its 1 lakh shares and the company can keep the price of each share at Re 1 or can make 2 lakh shares for 50 paise.
Apart from this, it should also be kept in mind that no company ever sells its entire shares. To preserve its ownership, the company always keeps more shares with itself and sells only a few shares outside.
Whoever has more shares, takes decisions for the company. Like Mark Zuckerberg, the founder of Facebook company, owns 60 percent of the company’s shares and 40 percent of the shares are with others. In such a situation, only Mark Zuckerberg can take all the decisions.
Let us now understand the secondary market
In the secondary market, people who have bought shares of a company can go out and sell the shares. Like you buy 10 percent shares of a company.
You can go out and sell 5% of your shares. This market is the secondary market. Now it depends on you whether you are selling those shares for more money or less money according to the demand.
stock exchange of india
There are two big stock exchange companies in India.
- Bombay Stock Exchange – There are about 5400 registered companies here.
- National Stock Exchange – There are about 1700 registered companies here.
- Nifty and Sensex are there to measure the price of companies.
How does the company sell its shares?
If a company wants to sell its shares through the stock exchange, then it is called public listing. For this SEBI i.e. SECURITIES AND EXCHANGE BOARD OF INDIA was formed.
This organization decides whether your company should have a public listing or not. Only after fulfilling all its norms, a company is able to sell its shares among the people.
If a company is not in demand in the market, then SEBI removes it from the public listing list.
How to buy shares?
Earlier the process of buying shares used to be a bit different but nowadays in the age of internet you need three accounts.
- bank account
- trading account
- Demat Account
Stocks purchased in a demat account are stored in digital form. That is why demat account is very important in the shares market. People who buy shares in the market are called RETAIL investors.
A retail investor always needs a broker.
What is a Broker?
The broker mixes both buyers and sellers. Just like you take the help of a broker while taking the property. Nowadays many apps have been made as brokers.
Even your bank can act as a broker. When you invest money in the market through a broker, you have to pay some amount as brokerage fee.
This amount varies between 0.5 to 1%. In such a situation, when you invest money in the long term, then you get less brokerage fee.
Is the stock market a loss-making deal?
No, it is not necessary that you will have a loss in the stock market. If you buy the shares of a company thoughtfully, then you can also make a lot of profit.
For example, suppose you have bought 1,000 shares of a company at the price of Re. Now the price of those shares has increased according to the demand and you sold this share at the rate of Rs 2, so you got a profit of Rs 1,000.
How to earn from stock market?
How to make money from stock market? This is an important topic. Prudence, understanding and strategy are very important to make money in the stock market. Apart from this, you should also have patience.
Let us tell you some fundamentals of being successful in the stock market so that you can earn big profits.
1. Complete Your Homework
This means that whenever you plan to invest in any company, first study about that company thoroughly. Look at the demand of that company in the market.
Suppose, now that the summer season is about to come, then in such a situation coolers and ACs remain in great demand. So invest in a company that sells these products and whose products are in demand. Then you can make profit.
2. Share in Business
Never invest in the price of shares but invest in the business. The best example of this is that Warren Buffet invested $1 billion in Coca-Cola in 1988. In return, he got 10 per cent return from the company for 10 years.
3. Don’t get involved in what others say
By this I mean to say stay away from sheep. Do not invest in anyone’s things. Study well first. You can take advice from an expert.
4. Always invest extra money
This is the best rule to make profit in the stock market. Always invest your spare funds i.e. money which you do not need in the short term. Sometimes the value decreases and due to the need of money, we sell our shares for less money. Don’t ever do this.
5. Track the Market
Just investing and waiting for profits is not the right move. It is important that you keep an eye on the market. Pay attention to when the stocks are falling, when they are rising. Read newspapers, watch TV channels so that you can keep track of your shares.
Friends, through my article, I have tried to explain to you all about share market in very easy language. So that you avoid investing in the wrong place.
In this article all the topics like what is share market, history, how to do investment have been covered. Along with this, we have also given some market terms in it so that it is easier for you to understand.
That is why if you ever invest in the stock market, then act with restraint and understanding. Study well and then invest. Never invest under any illusions. If you liked the article then do share.