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  • Category: Stock Market

    What is share market and how can one deal in share market


    Interested in investing in share market? Confused about how to start doing so? you need not worry, find responses from experts to yuor query here.

    I want to invest in share market. But due to lack of information or knowledge I am not able to invest in it. I want to know about dealing in share market. I want to know all things about the same. Which types of accounts are needed for it? How much investment required at starting point?

    If i have a just Rs. 2,500/- then in this situation can I enter in share market? In a initial phase I want to just learn about the dealing in stock market.

    Can you resolve my query?
  • #144298
    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.

  • #144302
    As basic concepts are already explained in a lucid manner by the other member I will not be repeating those things but I want to add some points here.
    Share market is a place of cautions and precautions. There are lot of opportunities and at the same time there are associated risks.
    There are two types of investors the first category invests and as soon as market goes high as per their satisfaction level they quit it making some money and again waiting for opportune moment when market slides to buy. These market players are very very knowlegeable in this area and select the timing of their investments with lot of pondering that is reading the concerned literature and sometimes considering the advice of experts also.
    The second type of investors invest for long time and meanwhile reap the benefits in term of dividends, right shares, bonus shares etc. In addition they enjoy the long term gain in the prices of shares.
    There are many factors which are instrumental in ones success in this area. Some of them are the selection of company, time of purchasing, time of selling, switching of shares etc.

    Thoughts exchanged is knowledge gained.

  • #144304
    Various Companies both private and public, to raise funds, offer some percentage of ownership to the public. This sharing is done through shares. Initially public has to purchase when company offers shares to public. After thatt public will be selling and purchasing these shares . Share market is the place where these transaction will be going on. If you have some shares of a company and if that company is doing good and getting profits they will be giving some dividend per share.

    You can trade these shares on line by opening demat account in any bank. Share business is a very risky business. When to purchase and when to sell these shares are to be decided very carefully. Daily we should follow stock market, see the trend and decided. It is better to take the help of some financial advisers, if we are not having knowledge about this market.
    This is risky saving but if we are careful and do the trading carefully we will get good returns. Otherwise we will lose money in this. We should be careful and do the trading under an expert advise.

    drrao
    always confident

  • #144337
    Share market is a marketplace where companies goes to pool up investment in exchange for the share of the company. So the shares may start from few Rs to thousands. In that case you'd have to consider dealing with the daily or long term changes of the company shares. Depending on the market changes and economy changes, you'd find that share market has it's share of changes.

    You have 2500 Rs to spend into the market. You can buy shares long term. Or you can instead invest into mutual funds with 2500 Rs per month or some lumpsum amount. Depending on how you choose to invest the strategy will be different in that case. So make sure you invest wisely.

  • #144375
    The first thing you need to start investing in shares is a Demat Account.
    Many prominent banks have facility to open a Demat Account. You may first ask the bank where you are already having accounts and dealings. That may make it easy and convenient.
    For buying or selling shares you need the help of a broker. For this you may need a trading account also.

    However there are some banks and financial facilitators who have the facility of both demat account and trading account.

    After the Demat scenario, one can even buy and sell just one share. So even with very less amount one can start investing and dealing in shares.
    I would suggest you help of a local or nearby broker or a bank which can give you all the needed facilities. Once you gain experience, you can do the trading online by yourselves.
    For learning purposes start buying only shares of some established and reputed companies whose price is not highly fluctuating, but gradually increasing, companies which give dividend regularly etc. Please also know that there is charge involved in all the steps in share dealings. Whether you make profit or loss, you have to incur these charges.There are charges for annual maintenance of demat accounts and trading accounts also.
    So it is better to earmark an affordable amount every month to invest in shares. Read financial magazines and financial newspapers to now about share market. Watch the discussions in TV channels in this regard.

    Always decide how much you can take risk. Do nit go beyond that. Be very reasonable in your expectations. Do not be greedy or aggressive at least until you become experienced .

  • #144537
    First of all understand what is a share market?
    This is a secondary market where buyer and seller ( share holder) do transactions.
    First of all when a company ( whether a private , public sector or Government) need to raise funds they give some of their company stake to public through IPO which is called as primary market.
    People apply to have that share through IPO, where as because it is limited so all investor do no get chance to buy those IPO, and then it get listed in secondary market, where the existing customer get chance to sell, also new investor get chance to buy from other traders.
    So if a person does not get chance to have share of company from primary market can avail from secondary market which is known as share market.
    To deal in share market you need to open a trading account with any of registered broker.
    How to open a trading account with a registered broker?
    Fill the KYC by giving your PAN card, cancelled cheque, six month bank statement, two photographs to open a trading account and DEMAT account.
    You can purchase of RS 2,500 stock but there are some account opening charges, transaction charges by broker so you can not buy of whole amount you are having in your trading account.

    It is a risky business so until unless you gain some proper knowledge do not invest money. You can trade in demo account provided by moneycontrol.com where you can learn as well as can earn ( virtual money) and will be getting experience to start real trade.
    Initially till one year you can choose only A category stocks to buy like reliance industries, SBI, Tata steel, Tata Motor, lersen and toubro etc,

  • #144703
    I would explain the concept in a very simple terms.
    If Ram wants to open a company and has no/less money. He has to raise the money which he does by an IPO (Initial public offering). He will distribute shares in the market. If I buy the share and Ram's company performs well I would earn and if the company does not perform well the value will degrade.
    It is obvious that I would sell the share when it has a higher price (Market Value) than the price I purchased.
    How we can deal in Share Market?
    You can open a Demat account. Many banks open it for free. In this account you can deal with Mutual fund, Shares/Equity etc. The bank charges some brokerage whenever you do a transaction (sell or buy) a share. The brokerage amount is different for different banks and it also depends on the plan you choose.


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