What is Stock, Share & Equity Market Full Guide!

What is Stock, Share & Equity Market?

First of all, you must know that the Stock Market, Share Market & Equity Market are all same!

A stock market or a Share market is a platform where buyers and sellers of stocks or(shares) which represents the small chunk of ownership of A business that is listed on a stock exchange.

Anyone can buy a stock of a company that is listed on the stock exchange through his Demat account and claims a small part of the ownership of the business of that company.

The stock market works on demand and supply rule. Demand and supply simply determine the price of a particular stock.

What is Stock Market, Share Market Equity Market

Demand in the stock market depends mainly on:

  • Economic data
  • Interest rates
  • Corporate results

For example, if the corporate results of the company are doing better than the overall market or it’s previous results means that the company’s growth is good and it indicates a green signal for buyers to invest in that company, which eventually increases the demand of that company and the company’s share price rises. In the same way company’s poor annual reports results in the decline of its share price.

There are two types to categorize people who work in the stock market:

    1. Investor(long term)
    2. Trader (Short term)

You can think of investors as a person who does all the hard work and takes the maximum out of any stock with a very low-risk rate. The investor always holds their money for the long term and let their money grow through compounding.

But, first, they do all the research of the companies in which he is going to invest because you can’t just invest your money in any stock. He will analyze all the balance sheets, financial reports, history of that company, Future goals of that company, and many other useful data.

Must Read: 9 Secret Strategy! How Warren Buffett made 85$ Billion Dollars?

He will do both management as well as financial analysis of the company and invest his money accordingly.

Now there is a trader, who invests in short term time in stock. A trader always goes with a trend you can also say, for a trader, the trend is his friend. He won’t do any management or financial analysis like investors did. Therefore, there is more risk involved in trading than investing.

In trading, you have to analyze the charts of stock and create your own strategy to create consistent profits. You have to learn all the price-action patterns and understand the dynamic flow of the market to be a successful trader.


Full Explanation Of Stock Market In This Video


Below is the list of the basic information you should Know about Share Market!

  1. Why the Share Market?
  2. How did the Stock market start?
  3. Purpose of the Equity market!
  4. Importance of the Stock Market!
  5. Long Term Investment Full Guide Tips & Tricks!
  6. Top-Notch Advantage Of Investing In Share Market!
  7. Disadvantage Of Investing In Share Market!
  8. Conclusion!

Guys! Don’t Get Confused Between Stock Market, Share Market & Equity Market, because They all are the same!

Why the Share Market?

The share market helps to serve the wider range of economies. It helps a person to make a profit on their income when they invest in stocks.

It also serves the government to increase spending by the tax revenue they earn from corporations that do trade on the stock exchange. The government then reinvest their earnings too. Increase employment capacity.

The share market plays an important role in the economy of a country in terms of cash-flow and Foreign investment.

It has helped individuals to generate a passive source of income and become wealthy and increases the overall standard of living in many economies. Companies can raise capital through the share market.

If the stock market didn’t exist then companies have to borrow money from banks which eventually increases their debts and to repay that debt, a small company will eventually collapse without doing any it’s expansion.

But with the share market, companies have the ability to create an initial public offering (IPO) and can raise large amounts of cash without having to worry about repayment. The share market benefits both the public and the company.

So I hope you understand Why the Stock Market or Share Market or Equity Market is Important!

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How did the Stock Market start?

Stock markets originated when countries began trading with each other. While many merchants wanted to start businesses but they required large amounts of capital that no single merchants can raise.

Therefore, groups of investors and businessmen pooled their money and became business-partners while holding the co-ownership with individual shares in the businesses and gradually forming a joint-stock company. These joint-stock companies became a feasible business model for many struggling companies.

In 1602, The Dutch East India Company issued its first paper shares. This exchangeable medium allowed Shareholders to easily buy, sell, and trade their stocks with other shareholders and investors through viable stock exchanges.

The joint-exchange idea was so successful that it spread to other powers such as Portugal, Spain, and France. In time, this practice found its way to England. Following this model, trading ventures were initiated. Other countries during industrialization adapt this method to raise capital for start-up businesses.

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Purpose of the Equity market!

The Equity Market is like a center of the global financial businesses that require the Equity Markets to raise individuals, charitable foundations, stock firms, and many other investors access the market to buy and sell stocks of these businesses.

Regulators are there to protect investors from abusive trading practices and to preserve the uprightness of the financial system.

The Equity Market provides businesses a platform to raise capital. Companies raise capital to expand their presence in the market, to build new infrastructure, to increase their production, so their market value can increase.

The Equity Market is a heart to the financial planning of a country. Anyone can hold stocks directly in their brokerage accounts (i.e.demat account) and indirectly through mutual funds.

The Equity Market is like the core of the economic system. They assign funds efficiency to businesses that make products and deliver services that customers require. The Equity Market acts as a backbone for GDP (Gross Domestic Product) of the country.

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Importance of the Stock Market!

The stock market is a significant part of the county’s economy. The stock market plays a vital role in the growth of the industry and businesses that eventually influence the economy of the country to a great extent.

Therefore, the government, industries, and even the central banks of the country keep close eyes on the performance of the stock market. The stock market is crucial for both industries as well as investors.

If there is a need for a company to raise capital for further expansion or founding up a new business venture; they have two options :

  1. To take a loan from the bank
  2. To issue shares through the stock market

In fact, the stock market is the main source for any company to raise funds for further expansion of the business.
For an individual also, the stock market plays an important role. The stock market can act as a passive income for people who are busy in their jobs and want to earn some side income.

So overall, the stock market is basically the backbone of the country’s economy and a boon for small startups to raise capital and expand their business.

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Long Term Investment Full Guide Tips & Tricks!

A long term investment is a way to provide higher returns and security with lower risks. Long term investments usually stay put rather than constantly buying and selling short term stocks.

It abolishes much of the risk and tension of constantly tracking the market to maintain short term investments. Many people often get confused about, “what does the meaning of the long term really mean?”, They think about a specific period of time.

But any investment more than a year is classified as a long term investment. When you do long term investing, you adjust your investments to maximize your returns in the long term rather than expecting results immediately.

You Might Don’t Know that Long Term Investment is very safe & Effective, Today I’ll tell you the most important factor regarding investment strategy are given below:

  1. What Is Long Term Investment?
  2. Why Long Term Investment?
  3. What Is The Benefit Of Long Term Investment?
  4. An important factor for long term investment?

Click Here! to See Long Term Investment Full Guide Tips & Tricks!


Full Explanation Of Long Term Investment In This Video


Don’t Miss! Top-Notch Advantage of Investing In Stock, Share & Equity Market

A stock market or a Share market is a platform where buyers and sellers of stocks or(shares) which represents the small chunk of ownership of A business that is listed on a stock exchange.

Anyone can buy a stock of a company that is listed on the stock exchange through his Demat account and claims a small part of the ownership of the business of that company.

The list is Top-Notch Three Advantage of Investing In Stock Market is below

  1. Higher Liquidity
  2. Versatility
  3. Higher returns in shorter periods of time

Click Here! to See All Advantage of Investing In Stock, Share & Equity Market!


Full Explanation Of Stock Market In This Video


Disadvantages Of Investing In The Stock, Share & Equity Market

There are many disadvantage & demerits of the Share Market but we had researched & Show to you Top 5 Disadvantages Of Investing In The Share Market are below:

  1. Risk Of Loosing Investment!
  2. High Brokerage & Low Margin!
  3. Loss Of Time!
  4. Impulsive Behavior!
  5. Lack Of Knowledge!

Click Here! to See All Disadvantage of Investing In Stock, Share & Equity Market!


Full Explanation Of Stock Market In This Video


Conclusion!

We have seen all the factors in the share market in the above section. Now, what does it conclude?

So, as we know that small start-ups can raise funds through the stock market by issuing IPOs(Initial Public Offering). This means the stock market has helped many successful startups to grow and expand their business, eventually turning their dream into reality.

The share market of a particular county represents their country’s overall financial statement. The GDP of the country is mainly dependent on the stock market as the products and services of any country are directly proportional to their finances.

Many people have become millionaires through the stock market. If you have the knowledge and can take a considerable amount of risk then you can too earn through it. It helps many people to become financially independent.

So, as you can see, the Share market plays a significant role in both large as well as small scale. It can turn dreams into reality by raising funds of high potential startups to make people financially independent.

Youtube Video For Stock Market: By CA Rachana Phadke Ranade

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