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Thursday, January 13, 2011

Actually What is Share market Business...??

A company can get funds in diffrent ways Share Market is one of the way.When a company is performing well and they need some funds for some big expansion they can go for selling their stocks.It is much better than getting loan frm the bank.But to enter a stock market the company has to satisfy certain norms of Securities and exchange board of India.

I suggest you to enter into share market business, if you have extra money with you, other than the money that you have to lead a peaceful life.

First of all, get the knowledge from the people who are doing share market business but don't depend on them. If possible, take training from someone. Goto stock broking companies, and observe the transactions going on... Learn for atleast 2 months. Then, if you feel confident enough, proceed further.

You need to have an account called DEMAT Account. For this, you need to submit your PAN card and some money. Then, you will be eligible to do this business upon your safe deposit.

A breif description about Stock Market:
History : 
  •  Privately owned corporations came into being gradually during the early 19th century in the United States , United Kingdom and western Europe as the governments of those countries started allowing anyone to create corporations.
  • In order for a corporation to do business, it needs to get money from somewhere. Typically, one or more people contribute an initial investment to get the company off the ground. These entrepreneurs may commit some of their own money, but if they don't have enough, they will need to persuade other people, such as venture capital investors or banks, to invest in their business.
  • They can do this in two ways: by issuing bonds, which are basically a way of selling debt (or taking out a loan, depending on your perspective), or by issuing stock, that is, shares in the ownership of the company.
  • Long ago stock owners realized that it would be convenient if there were a central place they could go to trade stock with one another, and the public stock exchange was born. Eventually, today's stock markets grew out of these public places.
The stock of a business is divided into shares, the total of which must be stated at the time of business formation. Given the total amount of money invested in the business, a share has a certain declared face value, commonly known as the par value of a share. The par value is the de minimis (minimum) amount of money that a business may issue and sell shares for in many jurisdictions and it is the value represented as capital in the accounting of the business.
  • In simple Words, a share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.
  • By owning a share you can earn a portion and selling shares you get capital gain. So, your return is the dividend plus the capital gain. However, you also run a risk of making a capital loss if you have sold the share at a price below your buying price
Quick Facts on Stocks and Shares
  • Owning a stock or a share means you are a partial owner of the company, and you get voting rights in certain company issues
  • Over the long run, stocks have historically averaged about 10% annual returns However, stocks offer no
    guarantee of any returns and can lose value, even in the long run
  • Investments in stocks can generate returns through dividends, even if the price
How does one trade in shares ?
Every transaction in the stock exchange is carried out through licensed members called brokers.
To trade in shares, you have to approach a broker However, since most stock exchange brokers deal in very high volumes, they generally do not entertain small investors. These brokers have a network of sub-brokers who provide them with orders.

The general investors should identify a sub-broker for regular trading in shares and palce his order for purchase and sale through the sub-broker. The sub/broker will transmit the order to his broker who will then execute it .

 Online Stock Trading is a recent way of buying and selling stocks. Now you can buy and sell any stock over the Internet for a low price and you don’t need to call up a broker.

 You can buy any stock and sell any stock and it doesn’t take much to get started. All you need is a brokerage account. A broker that I use is Scottrade http://www.scottrade.com/ and you can start an account with them for $500 and their commissions are only $7, so they are not expensive at all. 

Once you have setup a brokerage account you then need to choose an investment method and then research different companies and then buy stock in the ones that you feel will go up because they are good sound companies.

 For more information:

http://www.sharemarketbasics.com/


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