Basics of Stock Market

what is the stock market?

National stock exchange.

A simple breakup of both words, Stock is a particular good of the company, for example, hero moto corp has 1000 motorcycle so their stock is 1000, a Market is a place where buyers and sellers transact for goods and services. Its simple right stock market is like any other market now we only need to understand what kind of goods and services are up for sale and purchase.

First stock exchange

Until the emergence of the stock market an entrepreneur has to take a loan from a moneylender for expansion or for starting of the business and has to take all risk by himself/herself and had to pay huge amt of money in the form of interest.but all that changed when the Stock market was invented in Amsterdam when dutch east India company needed fresh investment for colonizing the new world(India, China, etc)they farm raw material in the new world and manufacture goods in Europe and then again sell them to the new world, the company wanted investment but didn't want to pay interest bcoz sailing was a risky business and insurance facility was not available so they were ready to share the ownership of the company to every investor, but they won't give them interest instead they distribute dividend(profit)according to their ownership, That was the reason my friends why Europeans were so efficient in colonizing almost all the globe. The better our financial markets are the better our country is going to do. Currently, the New York stock exchange is the largest exchange in terms of market capitalization (no. of stocks*price) and guess which is the most powerful country in the world.

list of large stock exchanges.

    

so the function is clear that a person can invest in a company and gets the ownership and will receive the dividend, But over the years people made trading, researching, investing, etc their full-time profession.

In simple words the stock market is like any other market, Suppose you go to a mall to buy a tea shirt and u have so many options to chose u will check every store and some company have good tea shirts but they are expensive and not worth it and some are good but doesn't have any brand value what u look in the market is brand value, quality, design, size, etc. These are the same principles that work in every market, You have fashion designer to select some clothes in the same way the stock market has analyst research firms with only one goal to identify the best company.

Investing is simple u have to read the financial reports of the company such as cash flow, balance sheet, and financial ratios, Only the last part is a little tricky otherwise any person can understand the financial statements of the company and if want to know more about how to analyze them read my blogs that I will be writing articles about all these statements.

Trading is risky and a little tricky u have to understand the market trend and predict future demand u also have to very actively watch the news for that, But after some time u will be able to manage to trade and investing. Stock market trading is also like doing trading business in any other market now let's suppose you sell tea shirt to retailers and buy on wholesale from manufacturers what do u need to understand is that what kind of tee shirts are in trend, clothing quality, price, margin, etc. The same principles apply to the stock market. Every successful trader picks one sector for trading, in the beginning, such as banking, Agri, auto, etc.

if u want to learn how u can earn 1000 from 5000rs from 1-4 weeks u can follow my page financial oracle at any social media platform.

thank u for reading.