Table of Contents
How Does the Stock Market Work in India? : Basics Knowledge For Beginners
Today our topic is How Does the Stock Market Work in India? : Basics Knowledge For Beginners
Before Trading or investing it’s more important to know about it.
Stock Market is a Smart Business. Basically, everybody heart that here share buy & sell is the main task, it’s right but not simple. Lots of factors are included with the Stock Market.
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Table Content:-
- Introduction
- Basic Information
- Stock Market working process
- SEBI
- Stock Company List
- Demat Account
- How to earn money from the stock market.
- How can identify the best stocks for investment?
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Details Read about IPO – Initial Public Offering
Shares are just a TOKEN or a number.
Then people analyze ABC Company and they try to buy those shares.
If you pay 30 rupees to ABC Company, that company will give you a token or share, just by buying the share you will see in your Demat account that the share has gone in your name.
Just think when you buy 1 stock of this particular company that means you’re a shareholder of this company.
Some persons think that if you buy a stock than stock or any company products you will receive. I again want to clear you that is wrong. You will just receive No of Stocks on the Demat account that you have purchased.
Read – What is Demat & trading account? How can you open a Demat & Trading account?
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Now suppose this is how ABC sold all its shares in the market and collected Rs 30 lakh from the market. This time ABC Company made its own mobile and launched it in a few months or year.(Example)
It was seen that by doing this business, the company has collected Rs. 1.5 crore in one year; it has made an investment of Rs.1 crore
Some of this extra profit goes to its shareholders as dividends.
This means that if you buy a share for Rs 30, after when the company’s profit will include with shareholders then the automatic share price will increase. The stock price will increase from Rs 30 to 45-50 or more.
I just gave you an example. But this is how the market works.
Now just think if ABC Company receives more orders. More orders mean demand increase. Demand increase means more branches opening. After all ABC Company’s total assets will grow.
Stock Company’s assets growth means your assets will grow.
That is the Stock Market working process that is the earning process from the Stock market.
If you see the stock market TV channel- Zee business, CNBC there you can understand when any stock positive result declared, these stock prices increase continually.
This is how big investors buy shares of good companies and the higher the profit of that company, the faster the share price goes up.
You go to Google and search – HDFC bank, titan, ICICI bank, HINDUNILVR, TCS, etc share price.
TITAN Price on 1999 – 4/- Rupees Only, Now 2020 TITAN Price – 1550/- Rupees
MINDTREE Price on 2010 – 130/- Rupees Only, Now 2020 MINDTREE Price – 1600/- Rupees
HDFCBANK Price on 2002 – 25/- Rupees Only, Now 2020 HDFCBANK Price – 1464/- Rupees
You will see that 10 years ago the price of the share was two hundred and fifty rupees. Today, the price of that share is two and a half thousand rupees.
That is 20 times growth within 10 years.
If you keep money in the bank, it takes 10 years for the money to double.
But money in the stock market is able to give you several times more money in less time.
That is why the stock market is called smart business.
After know, the Stock Market Working process identifies the best stocks for investment.
There are a huge number of organizations on the lookout and there are many hoodlums who will process your cash.
Some Important points that help you to found
- Yearly and quarterly major league salary.
- Low Depth or obligation free organization
- The development of the organization
- Branches of organization
- Pay wellsprings of the organization with the real world
- NPA of organization
- Future business net chance
- Pe Ratio Etc
All of the points are linked with Fundamental Analysis.
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So you have you confirm everything, at that point choose which stocks will fill later on.
Take on a similar mindset as a major big player. So you have to distinguish the best organization by noticing it impeccably. That one organization can make you a tycoon short-term.
Do we hope you enjoy the article about How Does the Stock Market Work in India? : Basics Knowledge For Beginners, and that you have come to the right place. If there are any mistakes in this article, or if you have any questions or concerns, don’t forget to let us know in the comments box.
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