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All About Stock Market
All About Stock Market
STOCK MARKET
WORKING REGULATORY FRAMEWORK WHY DO PEOPLE BUY SHARES?
INTRODUCTION:
Stock market??
The market for long term securities like bonds, equity stocks is divided into PRIMARY MARKET and SECONDARY MARKET.
PRIMARY MARKET Deals with the new issues of securities. SECONDARY MARKET Deals with outstanding securities. Also known as STOCK MARKET.
MEANING
EQUITY MARKET OR STOCK MARKET IS A SYSTEM THROUGH WHICH COMPANY SHARES ARE TRADED.THE EQUITY MARKET OFFERS INVESTORS AN OPPORTUNITY TO PARTICIPATE IN A COMPANY SUCCESS THROUGH AN INCREASE IN ITS STOCK PRICE.WITH ENHANCED OPPORTUNITY HOWEVER THE EQUITY MARKET USUALLY CARRIES GREATER RISK THAN DEBT MARKET.
SECURITY
BOND
STOCK 1)COMMON STOCKS 2)PREFERRED STOCKS
SHARE
MUTUAL FUNDS.
PAR VALUE vs. MARKET VALUE
ADVANTAGES
Advantages of trading markets Market is an environment with perpetual motions; these motions offer traders the opportunity to profit from them. Market is such as an ocean, if you act very well, it wills rewards you very well. Many jobs have unchangeable hourly wages or monthly salaries, your effort not rewarded and passing time makes money for you. But in the market there is no relationship between time and reward. You can make a lot of money in a short time depend to your effort and skills. As I mentioned, to be come successful in the trading environment you require a very high degree of self-control and self-confidence. So you should always try and train to improve behavior and skills. Among this training you know yourself better. This experience helps you all over life.
DISADVANTAGES
Disadvantages of trading markets As I mentioned many beginners underestimate the difficulty of trading and overestimate their ability as a beginner, also they have a lot of expectations. Therefore, most of them lose money and infect some degree of psychological damage upon themselves. When those traders can't achieve to their expectations, a conflict created between their beliefs about how things should be and the actual conditions that don't match their beliefs. This conflict causes stress, fear, anxiety, so on.
MARKET INDICES:
Stock market indices are the barometer of the stock market. BSE SENSEX,NSE-50 etc are some of the market indices.
Their usefulness:
Indices help to recognize broad trends in the market. The investor can use the indices to allocate the funds rationally among the stocks. Technical analysts use these indices to predict the future market. Indices function as a status report on the general economy.
These indices have just one job: To capture the price movement. So a stock index will reflect the price movements of shares while a bond index captures the manner in which bond prices go up or down.
3)Continuity.
4)Industry representation. 5)Listed history.
Why shares?
Because they can make big money on it. Compared to your investments in fixed deposits in banks it makes more profits ,but the bad news is that you are also expected to bear the losses ,if any. 1) Possibility of high returns 2) Easy liquidity
market, i.e.
stock exchanges.
10 20 20
Human element.
Technological changes.