Every business on the planet needs to have capital. This capital can be generated from founders, partners, and other financial investors. An investor takes crucial steps which come with risk and rewards. Investors invest in the companies to earn profits. But the important question is how to invest in the share market, as the share market is the centre place for companies to raise money and this money can be used for the development of the companies. To learn the basics about the stock market lets us start learning about stocks
Table of Contents
What are stocks?
Stock is a small unit of ownership of a particular company which is listed in the stock market. If you buy a stock of a company then you can get the ownership right or a small percentage of a company. So suppose if you own the xyz percentage of the company and you can also sell this stake directly to the buyer in the stock market. Since the stocks are unit owners in the company and its financial assets. The person who buys the following stock will be considered the stockholder or the shareholder of the company. But there is also different type of shares available in the market to invest and to explore this share you need to gain more knowledge about the stock market.
Why do Companies sell stocks?
As we know the company needs funds to make future growth, expansion and improve their business. During the fund’s generation and to avoid interest on debt a company list their share in the public market. There are some rules and regulations that need to follow by the company in order to become a listed company.
Different situations in the stock market
There are two situations in the stock market. This situation is known as the bull market and the bear market. A bear market refers to the market condition when the price of stocks is falling, which can also be indicating the economy is not doing well.
In terms of the bull market, the events are quite opposite. In the bull market condition, the price of stocks is rallying in the up direction or the price of the stock is increasing. In the bull market condition, the investor is confident which also indicates the growth in the economy. A bear market shows that investors are pulling back, indicating the economy is in a lower ratio.
One good thing to consider is that the average bull market does outlast the average bear market, which is way over the long term that can grow your money by investing in different financial assets.
What is the SEBI?
The SEBI is known as the Securities and Exchange Board of India, it is the securities market regulator to oversee any fraudulent transactions and activities made by any of the parties such as companies, investors, stockbroker and different financial firm which is a part of the stock market.
Method of investing in the stock market.
To invest in the stock market you need to be smart about your investment. So to avoid the risk which comes from an undiversified portfolio. So to make a better portfolio you need to have a diversified portfolio which will consist of different types of financial assets. It will protect your money in the market from inevitable setbacks.
Consider this example if you add your money to just one company which is of some sector, and if this sector faces some kind of shortage such as raw material or power shortage then the company can go in a loss. So to make this possible you need to shortlist mutual funds, ETFs, equities etc.
There are two types of people who add money to the market these are the stock investor and the stock trader. Both of them have different financial plans and goals for their investment. So to select a stock based on the stock performance you can invest in the stock market. There are lots of investment options in the stock market.
Stock investing is simple now to try investing in the stock market you can try the best stock market app known as the Kotak Stock Trading (KST) by Kotak Securities, With this app, you can create and smoothly manage your financial portfolio. You can oversee your investment and create your custom wishlist. With the KST app, you can add and remove funds you can use multiple methods for adding funds such as Credit cards, Debit cards, net banking and the UPI option.