Anyone explain me with an example of so what is stock market? how to invest in stock market and how actually stock market works. I’m a dummy in the stock market area, so looking for stock market explanation for dummies.
stock market explained for dummies easily understandable
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Samakshi baghel
In this question, I will explain what is the stock market? How to invest in the stock market and how actually stock markets work?
If you are a dummy in the stock market and looking for a stock market explanation for dummies so here is your solution.
What is the stock market and how it works?
The stock market is nothing more than giant global networks and organized marketplace where every day huge sums of money on loft back and forth. In the 1600s the dutch east India company employed 100s of ships to trade gold, spices, and silks around the globe but running this massive operation was not cheap to fund their expensive voyages the company turns to private prisons, individuals who could invest money to support the trip exchange for a share of the ship’s profit. These practices allow the company to four even grand voyages increasing profit for themselves and the savvy investors. Selling these shares into coffee shops and shipping ports across the continent the dutch east India company unknowingly invented the world’s first stock market since then companies have been selling funds from willing investors to support all kinds of business.
Today the stock market has schools, careers, and even whole television channels dedicated understandings. There are two national-level stock exchanges in India: the National Stock Exchange and the Bombay Stock Exchange. When private companies list their shares in the stock exchanges, they no longer remain private. They become public companies. But the modern stock market is significantly more complicated than its original incarnation so how do companies and investors use the market today?
Let’s take an example
Imagine a new coffee company that decides to launch on the market. Forts the company will advertise itself to big investors if they think the company has a good idea to get the first crack and investing and then sponsor the company INITIALS PUBLIC OFFERING or IPO this launches the onto the officials public market where any company or individuals who believe this business could be profit might buy stocks makes those investors partial owners in the business their investments help the company to grow and is a becomes more successful more buyers may see potential and start buying stocks as demand for those stocks increase. So is there price increasing the cost for prospective buyers and raising the value of the companies stock people already own. For the company, this increased interest help fund new initials and also boost its overall market value by sharing how many people willing to invest in their idea, however, if for some reason companion stock to seeing as less profitable and it may be possible. If investors think their stock value is going to decline they sell their stocks with the hopes of making a profit before the company loses more value As stocks are sold and demand for the stocks goes down the stock price falls and with it the companies market value. This can leave investors with big losses unless the companies stock looks profitable again. This see-saw supply and demand is influence by manufacturers. Companies are under the unavoidable influence of market forces such as the fluctuating in prices and materials. Changes in production method and technology and shifting cost of labor factors like new laws and trade policies. In this way, the stock market works.
How to invest in shares?
There are a few steps that you need to follow to invest in the share market.
Step 1: PAN or Aadhar card
Having a PAN or Aadhar card is mandatory to invest in shares in India. These documents are required for the KYC (Know Your Customer) purpose. You can open an account with India’s market regulator, the “Securities and Exchange Board of India”. As per the new regulations, you need to provide a canceled cheque and 6months’ bank statement for opening a Demat account.
Step 2: Hire an Intermediary (Broker)
Directly buying and selling of shares in the stock exchange by individuals is prohibited. Only a registered person or a company authorized by the “Security and Exchange Board of India”, who acts as an intermediary can trade shares in a stock exchange on your behalf. Such intermediaries’ service (broker) is chargeable, and they charge brokerage fees from you.
Step 3: Opening a Demat Account
Demat account is used to hold shares and securities in electronic format. Earlier shares were issued in paper format, but now everything is digitalized, and shares are issued in electronic form. All the electronic securities and shares that individual purchases are kept in the electronic form under the Demat account.
Step 4: Buying a share
There are risks involved in the share market. So you must keep a few factors in mind while investing in the share market.
You can also read the top 7 low investment business ideas here you will get many business ideas.