What is share market? - Basics of Share market in India

          In our daily life we usually hearing about share market either by tv news or by some other persons. Peoples also recommend us to invest in share market for maximize your money. But some other people also tell that share market is a gamble. But all these types of thinking are right at their perspective. Let me give you a example when someone buy some shares after a well research then it's good and you can't call this gamble but when someone buy some shares by influence of someone or thinking of maximize his money in less time then this type of investing called gambling. Basically it's depending on you to choose your way and invest your money in good shares which will grow your money with less risk. So i am here to provide a basic idea of What is share market? - Basics of Share market. This article can help you to choose your best way and provide a basic idea about share market. Using all these you can easily pick your shares and get a chance to grow your money.

What is share market?


What is share market?


      Well when we talk about share market it's like a shop where anyone can buy or sell their shares of listed companies. The prices of shares changes continuously. Simply share market is a option to invest your money and get average return of 10% to 17% per year. Where as you will get 5% 7% by a Fixed deposit. Inflation rate is 4% to 6% so share market can give more than inflation rate return. It's really help you in your long-term investing plan(5 to 20 years). As compare to any other share market give you a better return what you need just find the best shares.

         As we know when we talk about share market a similar market known as stock market. Where you can able to trade shares of companies as well as other financial instruments like Bonds, Mutual funds and Derivatives.

           Both the share market and stock market all the process done under platforms which known as stock exchange. It's provide the platforms to trade or sell any kind of shares or securities. Which was regulated by The Securities and Exchange Board of India(SEBI). Sebi was established in April 12, 1992 by Indian Government. It's a official security body which regulates the share and stock market. It's try to make the environment clean and easy to trade and sell and take strict action against value manipulation and insider trading to avoid any type of fraud.


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            In India there are two stock exchanges who manage all type of trades actively. First one is Bombay Stock Exchange(BSE), one of the oldest and fast stock exchange in Asia. It was established in 1875 and listed 1st stock exchange of india. Second one is National Stock Exchange of India(NSE).It was founded in 1992. Both of these stock exchanges basically provide a platform to invest safely. Barely 1.3% of the indian population invest in share market till 2018. While 27% of American population and 10% China's population invested in share market. But due to increase in popularity share market users increase in India quickly. People of india now showing intrest in share market and also invest actively.

Basics of Share Market 


Types of Share Market :

Basically there are two types of share market present in India

  1. • Primary Market
  2. • Secondary Market


• Primary Market :

       In this type market new companies get listed to stock exchange to raise fund from public. Simply they issue a certain amount of shares to raise fund. And use those funds to increase products, production or anything else. If the company selling share first time then it was known as Initial Public Offering(IPO).


• Secondary Market :

          After companies listed in stock exchange and made first sell then the share are now traded in secondary market. All this type of trades inbetween investors and stock exchanges using an intermediary known as broker. Brokers helps peoples to trade all types of securities or shares. In exchange they also charge. Different brokers provide different plans, you can select one of them and can start trading as soon as possible.


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How to get started?

         As we all discussed about broker, to start your investment you must need a trading account through which you can buy or sell your shares. There are lots of brokers like zerodha, upstox, angelone, kotak securities etc. Who provide trading platform. Choose one of them then you need to open a trading account. Follow the article further.


Documents needed for demat or trading account :

         To open a trading account in india you must be an indian and your age should be 18 or above. Then you need given documents 

Identity proof : Pan card is must needed for opening of demat account(pvc card)

Address proof : For address proof you must need any of them - Aadhar card, Driving license, Passport, Voter id or bank account statement (updated).

Income proof : For income proof you can submit your last 6 months bank statement or last 3 months salary slip.

Signature : you must need your signature on white paper.

Bank proof : For bank proof you have to submit cancelled cheque or passbook or last 6 months bank statement.

Photograph : You also need a passport size photo(recent one).

         These days all the process to open a demat or trading account is online. You can easily open demat account while at home. Keep all the documents and submit them while required. Pay the required amount to open demat account now you can start buy shares of companies.


How to decrease Tax?

         As we all know tax is something which can effect your total money. When you talk about tax for Short term investment (less than 1 year) it was 15% but when it comes long term investment(more than 1 year) the tax will be 10%, either its 1000 or 1cr. So it's better to invest in long term plans. It will definitely decrease your tax.


How to choose best shares?

Research before buy shares


           It's really need a deep research to choose or select good shares. But here i will provide some important factors which will help you to find good company shares. Disclaimer : i just try to provide a basic idea to check before investing in share market. It does not mean thats all for get best shares. There are lots of technical instruments or factors which also plays a major role while choosing a company share. I just suggest some factors which may help you to find best shares.

Management : Success of any company will depends on the management team. Company's success or growth directly depends on management because of only management can finalize the decisions which may directly effect the growth. Companies having good management team with great future perspective, fitting spirit and decision making ability will definitely grow the company as well as increase the profit. As an example when we talking about leadership Tata groups of companies are the best company in India as well as in world. So check the management team before invest in any company shares.

Debt : Basically companies takes Debt for their expansion or acquisition or grow production or any other resons. Time wise they pay their debt. So basically less the debt high the chance of profit. It doesn't mean it's only factor to selection of shares. All the factors interlink each other.

Growth : Basically you can easily check the past growth of the company before invest in any share. If the company have some great records then high chance of the growth in future. Became a company showed growth only when the products of the company are good and good management team. So past growth can help you to choose best one. 

         These basic factors you must have to look once you before invest in any share. Money is money either it is 100 rs or 1,00,000 rs. So invest your money in safe companies where you can get 10% to 15% per year. And they also decrease risk.


Conclusion

Time is money


       Share market can make you zero to hero and hero to zero. So it's totally depends on you what you want? With proper research you can earn lots of money. Just find them and invest on those types of companies. As a investor you have the right to choose your best shares. So before doing that you must know the basic knowledge of the company. And market valuation of that company. 

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