The stock market is a place were we invest our money,for the purpose of getting A higher return.The investment in stock is much risky, which draw attention to The huge gains and losses of some investors.
If you have a better Experience or knowledge And if you have a knowledge of how to manage the risk,then you can take the advantage of The stock market to secure your financial position and earn money.
The following are the adavantage and gains in investing in stock market:
If you retired from your job and you are planning to earn money For your future,it is beneficial to you. But be careful, you can invest in trusted companies shares[e.g. state bank of india(SBI),life insurance corporation of india(LIC)etc.].
firstly, I can tell you the meaning of liquidity -it means the convertibility of bonds, shares, securities in cash immediately. If you want to sell your shares and have shares of any companies then you can sell it online from your system(e.g. desktop, laptop, mobile). In the Indian stock market trading, two stock exchange ,
The Bombay stock exchange(BSE) and National stock exchange(NSE) play very important roles. Most of the companies are trades their shares on either or both of them(e.g. Stock exchanges). They provides higher liquidity to the invester because Average daily volumes are high.
Therefore, if an invester wants to buy or sell any product on the stock exchange, they can buy or sell its products and convert it in cash or in liquid form immediately.
c.Higher returns in short-term period:
If we compare with other types of investment product like bonds, and fixed deposits, stock investment suitable for him and it is excellent investment vehicles to pool our money to a great extent. Making greater return in shorter time period. Before investing money in any products of stock market,
You shall make a pre-determined planning for trading, doing the research and due diligence , you should maximize the return on share market investment.
A stock exchange is a economic barometer that provides a reliable data about our economy.it measures the economic condition of a country. Every major change in the economy of a country shall have direct impact in prices of stock market.
The rise or fall in the prices of stock shall indicate The boom and recession cycle of the economy.
Stock market is also known as heartbeat of economy or economics mirror which highlight the economics condition of the country.
The stock market reflate the value of securities on the basic of demand and supply factors. It means the securities of profitable and growth funds or companies are valued higher as there demand is high of such securities.
The valuation of securities is more reliable for investors, governments and creditors. For the help of this function the investors can know the exact value of its investment,
The creditors can determine the value of its creditworthiness. It will help to the government for imposing taxes in the securities.
The stock market is a economic investment instrument that pool the growth and conditions of the economy of the country. Because when we invest in stock exchange securities of various companies then our money go to the corporate hand and they utilize its in business activity.
So businesses of any country grow and develop so our economy will grow.
Due to this reason there are many investment schemes or options are available to us and you invest your money in good schemes and get higher return.
The main function and benefit of investing in stock market is that it provide a ready market for sale and buy of securities. It indicate the greater liquidity of our investment.
It means investors investment can be converted into cash whenever they want.
The investor can invest in long term projects and whenever they want , they can convert long term investment and medium term.
Presently, There are many challenge faced while choosing a right stock for your portfolio. While buying a stock, the basic rule is that you should know your financial goals that you want to reach. Some may look like there market value are growing, while some may look like they are dividend oriented that means, they pay high dividend. The next step is that how to choose a best stock for conducting a stock research.
For searching a stock for our portfolio the best way is that you can the companies, Cash Flow Statement, Income Statement, Balance Sheet, Profit and Loss Account, Management Future Plans and must check its borrowings/Liabilities or debt policy, etc. By analysing the data, facts. You should know its EPS(Earing Per Share), Net profits, etc.
If the EPS(Earing Per Share) is good, it means the organization is making a profit on a pre-share basis. You can also analyse the its market position of stock market and take a good decision about your portfolio.
The Securities and Exchange Board of India (SEBI) is regulate and control the all trading system of the securities market in India. It means, the SEBI is the regulator of securities market in India. The investment market needs to follow the rules and regulation of Securities and Exchange Board of India (SEBI).
The SEBI ride herd on all the function of the stock market and protect the interest of the investors, issuers, and intermediaries like stockbrokers. The SEBI shall protect the investor from all the malicious and fraudulent schemes of the stock market. SEBI frame a code of conduct, which shall be followed by brokers, bankers, underwriters, etc.
It will check all the spam and prohibit all the insider trading. SEBI also educates investors, so that they shall evaluate and buy profitable securities.
If you are interested in trading in stock trading. You will find most of the stock related information on the brokers trading website. The brokers trading site provides you real time stock quotes through charts. It also provides you all companies stock position comparison through a chart.
And it will improve your decision making ability for your investment plan. The online interface also displays all the information of well performing stocks, its gross and net profit and loss, dividends, earing per share, shareholders benefits etc.
The brokers site is like a stock analysis tool that will provides all the manual and technical help, for building your futures in the securities market.