You must have heard of share , market , share trading , but if you are not aware of this , we will be discussing about it in this post , the share market is a place where , if invested wisely and cautiously after proper learning , you can earn money working in it ,either working part time or working full time.
All you required certain skills for trade.
For those the words like share, share market, share trading are like aliens , they can also invest in market like expert just following some articles on our blog .
Shares/ Stock – let suppose a company want to expand its business, but it does not have funds,
If a company requirement is 100 lacs , but it only have 40 lacs
Requirement of = 60 lacs
What will it do –
- Either it will buy loan from market
- It issues shares
Shares – shares are denomination of money like a coin or note, if you invested in it , you get ownership in business as per your share holding ratio .
If they divide the total requirement ie 60 lacs dividing by 10 rs share face value, ie 60,000 units of shares ,
That means company offered 60,000 unit of its ownership in the market for fulfilling it business requirements by way of 10 rs each face value share .
Suppose three person – Mr. x bought 100 unit ,
Y- bought 200 units,
z- Bought 50,000 units
they are now entitled for their respective unit holdings Stake in the company’s business .they become now share holders’ / Stock Holders’ of company .
Benefits of shares/ stock –
- Share holder earns dividend on shares on annual basis
- If companies is performing well , giving good results , expanding, then face value of share increases ( suppose face value 10 is now selling in market at 11 rs market value in present) because of companies profit , it gives 1 rs premium to the owner of share holder.
It is just like you purchase a house and you rented it – you are earning dividend in form of rent , also premium on increase in market value of share price, but caveat emptor , there are losses also in market value of share.
- If you have shares in large quantity as per every companies norms , you are given right in the participation of working of companies
- The reason people are tempted to buy shares are they give good returns ie 1 percent to 100 percent, if invested wisely after proper analysis. Unlike bond/ fixed deposits where return that is fixed.
Cons of shares
Shares are subjected to market risk; they can deplete your money also if business fails or company fails.
Irrespective of their tendency to give losses, many investors want to invest in share, because they multiply money many times/ give returns better than normal fixed deposits/ bonds.
- if you are learned in the practice of share trading .
- Purchased in right time, in right conditions.
- Courage for bearing minimal loss.
If you are still willing for learning market more, then our article will guide your way in the market.
For more insight in – visit- https://thelastclose.blogspot.com
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