The “stock” is a share in the ownership of a company. A stock represents a claim on the company's assets and earnings. As you acquire more stocks, your ownership stake in the company becomes greater.
A stock market or equity market is the aggregation of buyers and sellers, these are securities listed on a stock exchange as well as those only traded privately.Holding a company's stock means that you are one of the many owners (shareholders) of a company.
A stock is represented by a "stock certificate" this is a paper proof of your ownership. Now-a-days we can use a “Demat” account. Everything will be done though the computer electronically.
Stocks operate on the rule of Supply and Demand. As the high demand for a stock more people are interested in buying than selling, the price of the stock goes up. Stocks demand is depend upon the company performance.
It is impossible to predict that how stock market will behave.This is why there is so much risk associated with this form of investment. Demand is often based on expectations of future performance. When investors feel that the company will be performing better in the near future, demand increases.
Stocks can also be broken down into different classes if the company chooses. There are two main types of stocks: common and preferred.
Common stock is stock that is most recognizable to newcomers. It is a share in a company. Common stock can give some of the highest returns in investing, but comes with the largest risk.
Preferred stock gives same ownership like common stock does, The dividends paid out by preferred stock are fixed instead of variable like common stock.
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Very good content given on indian stock market by blog author with accurate information. With these content any investor can make profits from stock market.
ReplyDeleteshare market basics for beginners