You have to be living under a rock to not be aware of what the share market or the stock market is. In simple terms, a stick market is a place where companies list their stocks for the common man to invest in. Before you dive further into learning what the stock market is. Let us learn what a stock is. Basically whenever any company launches it’s IPO, which stands for initial purpose offering, it offers it’s shares to the public at a fixed price. These share represent a fraction of the company. Any person who owns a share of a company, is said to own a part of the company. Usually shares are listed in the stock market of a particular company however, interested and willing buyers can also buy sell unlisted shares by contacting their broker or dealer.
Basics of stock market
The first thing you would have heard about stock market would be that it can turn you into a millionaire overnight or it can force you onto the streets in a matter of seconds. The stock market is known to be a highly volatile place. It is always advised that people invest only that amount of money that they are truly ready to lose. Often people remain under the false conception that stock market would provide them supernatural returns on their investments so obviously greater the investment, greater the returns. However, this is one of the biggest mistake you can make as an investor. Being thorough with your research and cautious with your money is one of the most basic rules of the stock market. While it is true that this market does provide supernatural returns, it is not always a guarantee.
What to know before you invest?
Mainly there are two types of shares. Listed and unlisted. When it comes to unlisted shares, it is important that you find a trusted and authentic unlisted shares dealer to provide you the knowledge and know how of unlisted shares. When it comes to listed shares, the market is pretty simple and straight forward. Many people, after they’ve done proper research, decide to become day traders and eliminate a middleman or the broker all together. They themselves study and analyse the trends of the market and then decide what stocks to invest in and what not. This profession is a highly risky one and only a few people who venture into this line are able to become successful. This is because of the same characteristic of stock market mentioned above, volatility.
There is definitely no shortcut to success. People often assume that simply investing a huge chunk of their income into the stock market would help them achieve financial freedom. However, people need to understand that the stock market is not a place where luck or chance dominate the stakes. One has to be thorough in their research and fully understand a decision before actually implementing it. Just because a person makes a few big or small profits a couple of times, does not mean that they have become well versed with the market.