Share market is basically a trading place where people purchase and sell shares of listed companies. Let us understand the things in their basic forms so that we can take a better decision in this direction.
Companies (few example: Hindustan lever, Brook bond, Colgate, Reliance, Tata, Birla, HDFC Bank,ACC, L & T, TCS, Infosys, Dr Reddys Lab etc) have issued their shares to public long back at a nominal price Rs 10. As the companies have progressed and economy and GDP of the country has progressed today these shares are quoting in share market at a significantly high value.
It is a continuous process as some new companies are joining the fray and issuing their shares today at a nominal value of Rs 10 or if the company is doing well it may ask a premium on its share and the share may be purchased by public at a higher rate say Rs 350 but its face value will be only Rs 10 and if company pays a dividend of 30% you will get Rs 3 as dividend on one share on its face value.
Once you understand this we go slightly ahead. Depending upon the economical, political, global and other factors the market does not go up only, it very well slides down and historically there were occasions when markets came down drastically and people lost their all the money in share market and literally came on the roads. So ups and downs are in the nature of share market and even the experts are unable to predict it with confidence.
Anyone at anytime can open a demat account in a bank and pay its fee which is in the range of Rs1000-3000 per year and use the banks online portal for share transactions by logging in it. Generally a savings bank account is linked to it for taking out or depositing in the money after the transactions. There are many non banking agencies also doing this job like Sherkhan, Indiabulls etc.
You can transact in shares, mutual funds, bonds etc from this demat platform. Generally shares of a good company give good returns in long run but this is not a guaranteed rule as depending upon the change in technology and demand in the market a good company may close down making the value of your investment zero.
I will advise you to read some magazines and literature regarding this subject and after this basic lesson you can increase your understanding of the things by that before really going to invest in this arena.
Knowledge is power.