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Thursday, 1 October 2015
What is Share Market and how can people take vantage of it!
Many people have heard either by news channels or by people's talking around him that a company share's picked up a hike or someone has sell his share's in high price. What does it mean, What is Share Market and how can people take vantage of it. A layman does not understand such type of market until he get involved in it.A share market is a place where shares are traded and trading of such shares has a direct impact on the country's economy. So understanding the share market of your country is definitely important too.
A stock or a share basically represents the ownership of a company including its assets or earnings,Company give such ownership because it needs money to meet its costs or want to expand his business. And this type of financing can be debt financing i.e.borrowing money or equity financing i.e selling stocks.
Debt financing will requires the company to pay back the loan which also includes the interest, whereas in equity financing there would be no interest and also a anticipation of not paying back the money at all. Moreover, in case of failure the risk is spread amongst the large number of stockholders.
From where a company will find such people's who are insterested to buy his stocks? That's where the stock market comes in. Stock market acts as a common platform for the buyers and sellers of stocks. And Online traders helps those investors who want to buy the desired stocks even if he cannot be present at the stock exchange, or does not know which stocks to buy.
A stock broker or an online share broker keeps himself updated on the share market and is experienced with trading of stocks. He then guides the investor about how and where to invest, for a brokerage fee.