The best advice for beginner before Investing !
The Share Market: What Is It?
Buyers and sellers exchange shares of publicly traded corporations on the share market. A unit of ownership in a business is represented by a share.
Share Market Types (Main Market):
Companies use initial public offerings (IPOs) to sell new shares to the general public.
The business sells directly to investors.
The secondary market
Stock exchanges are used by investors to purchase and sell existing shares.
Examples include the Indian National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
Terms & Meaning :-
| Term | Meaning |
|---|---|
| Share/Stock | Ownership in a company. |
| Equity | Another word for shareholding. |
| Dividend | Part of profit given to shareholders. |
| IPO | Initial Public Offering – when a company first sells shares to the public. |
| Bull Market | Period when prices are rising. |
| Bear Market | Period when prices are falling. |
| Sensex/Nifty | Indexes that represent market performance (BSE Sensex, NSE Nifty 50 in India). |
| Broker | A person or firm that facilitates share buying/selling. |
| Demat Account | A digital account to hold shares electronically. |
| Trading Account | Used to buy/sell shares in the market. |
How Can I begin Purchasing Shares?
*Open a trading and Demat account with a broker (such as Angel One, Upstox, or Zerodha).
*Connect your bank account.
*Investigate businesses or seek professional guidance.
*Purchase shares via the platform provided by your broker.
*Keep a close eye on your investments.
What Causes Changes in Share Prices?
*Performance of the company
*Market patterns
*World events
*Investor attitude
*Economic metrics
Risks and Benefits:-
Benefits include ownership, dividends, and capital gains.
Risks include losses, firm failure, and market volatility.
How to make Demat Account :-
Opening a Demat Account:
Step 1: Select a Participant in the Depository (DP)
Typically, a DP is a financial institution or brokerage that is registered with:
National Securities Depository Ltd., or NSDL
Central Depository Services Limited, or CDSL,
Popular Brokers in India:
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Zerodha
-
Upstox
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Groww
-
Angel One
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ICICI Direct
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HDFC Securities
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Kotak Securities
Have These Documents on Hand, What you will need is as follows:
PAN Card (required)
Aadhaar Card
Details of the bank account (passbook or cancelled check)
A passport-sized photograph
White paper with a signature
Online Application (Fastest Method):
The majority of brokers allow opening an account online:
Go to the broker’s app or website.
Click “Get Started” or “Open Demat Account.”
Enter your name, phone number, email address, and other basic information.
Upload your Aadhaar, PAN, and other papers.
Use an OTP based on Aadhaar to complete eKYC (Electronic Know Your Customer).
It could be necessary to provide In-Person Verification (IPV), which is often a quick video or selfie.
Use e-sign to sign (via Aadhaar OTP).
Await the activation of your account:-
After being accepted, which normally happens in one to two days, you will receive a Client ID and Demat Account Number.
You can now begin investing by logging into the trading platform.
A trading account buys and sells shares, but a demat account retains them. Most brokers open both at the same time.
Opening fees for accounts: A lot of brokers provide free Demat account opening.
Depending on the broker, Annual Maintenance Charges (AMC) can range from ₹0 to ₹500 each year.
Types of Shares:-
Common Shares, or Equity Shares
These are the most typical shares that businesses issue.
Qualities:
The right to vote
a portion of the business’s earnings (via dividends, if declared)
High risk but perhaps large rewards
Remaining claim upon payment of obligations and preference shareholders
Equity Share Types:
Description of Type:
Bonus Shares Existing stockholders received free shares from the proceeds.
Rights Shares:-
Discounted and made available to current shareholders before the general public.
Shares of Sweat Equity :-
Given to directors or staff in exchange for expertise or services:-
Both Voting and Non-Voting Stocks:-
Voting rights may be restricted or nonexistent for certain equity shares.
Shares of Preference:-
When it comes to dividends and capital repayment, these shareholders are given precedence over equity stockholders.
Qualities:
Dividend that is fixed.
Limited or nonexistent voting rights.
Priority in liquidation over equity stockholders.
Description of Type:-
Total Dividends that are not paid are carried forward.
Not Cumulative Dividends that are not paid are not carried forward.
Redeemable Can be repurchased by the business after a predetermined amount of time
Unredeemable Not redeemable (very uncommon these days)
Adaptable Later on, it may be changed into equity shares; however, it is not convertible. Not convertible into shares of stock
Taking part After dividends, eligible for further profits
Not Taking Part No additional profit share, only set dividends
Other (Least Communal) Types:-
Description of the Type: Golden Shares Give the government or a few chosen shareholders special authority.
Options for Employee Stock (ESOPs) provided to workers as a component of their pay
Postponed Stock Dividends are rarely paid now after other share classes.
For similar Article :- https://techpaisa24.com/investing-money-is-better-then-savings/
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