What is share market ?

New to stock market? I will take you through the world of share market in this article. Firstly, let us learn what is share market? Share market is where buying and selling of share happens. Share represents a unit of ownership of the company from where you bought it. For example, you bought 10 shares of Rs. 200 each of ABC company, then you become a shareholder of ABC. This allows you to sell ABC share anytime you want. Investing in shares allows you to fulfill your dreams like higher education, buying a car, building a home, etc. If you start investing at a young age and stay invested for a long time, the rate of return will be high. You can plan your investment strategy based on the time you need money.

By buying share, you are investing money in the company. As the company grows, the price of your share too will increase. You can get profit by selling the shares in the market. There are various factors that affect the price of a share. Sometimes the price can rise and sometimes it can fall. Long term investment will nullify the fall in price.

Why at all a company sells it shares to the public? A company requires capital or money for its expansion, development, etc. and for this reason it raises money from public. The process by which company issues shares is called Initial Public Offer (IPO). We will read more about IPO under Primary Market.

You would have always heard people talking about bull market and bear market. What are they? Bull market is one where the prices of stocks keep rising and the bear market is where the prices keep falling. Where all these buying and selling happens? NSE (National Stock Exchange) and BSE (Bombay Stock Exchange). These are the two major stock exchanges in India and are regulated by SEBI (Securities and Exchange Board of India). Brokers act as an intermediary between the stock exchange and the investors. So to start investing or trading, you have to open a demat account and trading account with a broker. You can open demat account online easily through a simple process. After linking your bank account with these accounts, you can start your investment journey.