Share Market Beginners Guide


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Share Market Beginners Guide

  1. 1. Stock Market Beginners GuideWhat Are Stocks ?In most simple terms stock can be defined as a share in the ownership of a company. If you are aStock holder of any company It simply represents a claim on the assets and earnings of thecompany. Shares, equity, or stock, These all terms means the same thing.Being Share Holder means Being OwnerBeing Shareholders of a companys stock means that you are one of the owners of the company.Here Company means that an individual entity. Thus you have a claim to everything the companyowns. Being stakeholders of the company What major rights do you posses ?1.To receive the share certificates2.Stakeholders may collect the annual report sheet, profit and loss account statement3.Stakeholders have the rights to vote in annual general meeting of the company4.Stakeholders have right to receive the dividends approved in annual meeting5.Stakeholders may receive the corporate benefits like bonus, dividends6.Stakeholders may inspect the registers of the company at the registered officeA stock is represented by a stock certificate. But in todays digital era you are not given thecertificate because your broker keeps these records in the electronic form. This is done to make theshares easier to trade. History of stock market says, when a person wanted to sell his or her shares,that person physically had to take the certificates down to the brokerage and condition for tradingwas that Quantity and price of the shares must match. But now, trading has become more easy witha click of the mouse or a phone call.If you are a stakeholder of any company it doesnt mean that you can interrupt or have a say in theongoing business. For instance you are stakeholder of TATA STEEL. It doesnt mean that you cancall Ratan Tata and suggest him how you think the company should be run. Rather you just havethe rights as per the guidelines of the SEBI.Types of Stock1.Common Stock : Common stock is shares of stock. It means that the stakeholders who havingcommon stock, may also have the rights on proportion of the companys dividends, voting rights,and earnings growth.Further these stocks are divided into two categories.First one is Class A, Shareholders in this category are having the voting rights but other one Class Bshareholders are not having these rights.2.Preferred Stock : These stocks are given to particular individuals or institution. The onlydifference is that these shareholders are given priority when it comes to the company dividends.3.Unlisted Stock : Unlisted stocks may be common or preferred but these are not listed in the stockexchange. These kind of stocks are generally bought in the secondary market. These stocks may bepurchased in the direct placement.6 Best Investment StrategiesStep I : If you are a fresher to this market it is highly recommended that you must opt the servicesof reputable brokers in the market. Make sure to have enough money to start with the brokersservices. This way will not make you a expert of stock market though if you are busy with yourdaily full time job schedule you can entrust your broker to handle your all trading activities.
  2. 2. Step II : Get educated ! You can earn a lot about stock market by reading articles in the newspapers. You can also opt for a stock market classes on line.Step III : Read Research companys or individuals blog to develop and analyze your investingstrategies. For Instance look up for Stock Tips.Step IV : If you are doing all the trade yourself you can start investing via buying the localcompanies stocks with which you may have the confidence and trust.Step V : You must divide your whole investment into equal number of parts. If your stock ishealthy and growing; Book your partial profit and hold the rest stock with a minimum stop loss.Step VI : If your broker is not doing well with the trading activities i.e. If you are not earning as peryour expectation. You must approach a research companys stock recommendations.One of the primary advantages of investing in stocks is the possibility of greater returns. Ascompanies grow, the value of stocks also increases.To get the highest returns on your investmentfollow the Share Tips of Research Companies.This Article helps you out to understand the stock market basics. It contains a brief introductionabout the stock market. It is one of the best guide for freshers of stock market.Reference :