Stock market
Stock market is an individual entity that helps people to deal in stocks, bonds, shares or any other kind of securities. Equity market is the other name for stock market. It is a place where the stocks and the shares are dealt at an agreed price. There is an exchange which regulated the stock market.
Stock exchange
The stock exchange sets the rules and the regulations for dealing in the stock market. The stock exchange in India is guided by the Securities Exchange board of India which is the SEBI. Only those companies’ shares that are listed in the stock exchange can be traded in the market. So to get themselves listed in the market they have to meet some criteria that are stated by the Securities Exchange board of India. In India there are two exchanges:
- Nse which is the national stock exchange
- Bse which is the Bombay stock exchange
Need to deal with the stock market
People deal with the securities it get income. They trade in order to get a good return on investment. Say for instance one will get dividends when they hold shares of a company and similarly they get interest when they hold bonds. They also make a profit when they are able to sell at a price which is more than their purchase price.
For every business to do well they need capital. Also for expansion capital is needed. This capital is raised with the help of issuing shares and debentures. One can trade with the shares of different companies and different commodities.
Though share trading is a term that has been in use for a very long time a lot of us find it a little difficult to comprehend what commodity is trading, forex trading and share trading which is why we find it difficult to deal in the market so here are some tips.
Tips to deal well in the NSE
- Investing is mandatory, cause when not invested wisely there will be a great reduction in the purchasing power an also the value of your savings.
- Investment should be made only in companies that are very strong. One needs to understand that the stocks of the strong companies are also liquid stocks. One can sell the stock back to the company when they want and it is always a safe bet to invest in a strong company.
- It is very necessary to read the offer document properly before investing in any bond or fund. No hasty decisions should be made while investing because all these shares and bonds are subject to the market risks.
- If you are young it is better to invest in the equity where the risk and the return are high but then if you are an older person it is better to get out of the equity market.
- The best way to better into the market is through an IPO. That is an initial public offering. Especially the initial public offerings of the PSU’S are very good as there is very little risk associated with it. Not only that there will also be some amount of discount that will be offered for the retail investors.
- It is a very wise thing to invest in mutual funds as the risk to lose the capital is very less. It is very dominant form of investment in India. It is very suitable for small and retail investors. There are a lot of mutual fund schemes so one has to really know the scheme well before investing and also choose that scheme that is really suitable for their needs.
- The main thing in the stock market is one should know when to sell the stocks. One does not gain much by just holding the stock that they have purchased. Most of the experts advise to only hold but then to make profit set a target and once you reach that sell the shares.
- When the dealing is done with the help of brokers or intermediaries choose only the ones who are registered. Never be guided by those who are unauthorized just because they tell you they can help you get abnormal profits. It’s safe only to deal with the authorized intermediaries.
Always have an idea and check of what is happening in the stock market so that you do not lose track.