What is Share Market: Sharemarket Basics

You have landed here to learn about Sharemarket because of tremendous trends. Now everyone is involved in investing in stocks.

What is Share Market? Many of us are not aware of how the stock market works. Due to a lack of knowledge in the share market, Indians are facing a setback.

India is the second-highest populated country in the world. There are almost 140 crores population in India. But only 1.5 crores are investing in the share market.

This is the pathetic condition of the Indian stock market condition. Now, the trend is changing at a quick pace. All are waiting to bag huge returns from the share market.

In this modern-day world, competition is at the next level. Each company is striving to take its place in the competition. Many people have understood that doing 9 to 5 jobs won’t make them millionaires or long-term benefits.

So, this is the right time to start the journey in the share market. Before diving into the pool one must know the swimming. Otherwise, he or she can’t survive for a long time.

In this blog, one can get various answers to the question below

1. What is the share market
2. Why invest in the share market

What is Share Market

This is one of the valuable questions and relevant answers are very rare. So, here you can understand What is share market? in a simple manner.

Now, imagine two friends have started a fruit stall. Let assume for initial investment be INR 50,000. Eventually, both the friends have made 50% of the total investment.

So, two friends have made an investment of 25,000 each. Then the business will start getting more consumers and get more revenue.

Now, both friends are happy about the growth trajectory of the business. But now both friend decides to grow their business in different cities or to open more fruit stalls in different localities.

If they depend on the revenue to open new fruit stalls, then it would take years to open just two new fruit stalls. To receive a big investment, one cannot raise by friends or families.

Eventually, they will end up listing the company in the stock market. Now, both friends will give the details about the performance of the company previously.

Then both friends can sell the part of the company to raise the funds/money. This part of the company is called as Share of the company.

Depending on the performance of the company, shares prices are fixed. Now, people can buy the shares of the company to make good returns.

Here, the owner of the company and buyers are beneficiaries. Because the owner will get the funds and buyers can expect good returns in the future.

So, one can be part of a good and profitable company. Buying shares can make you own the part of the company.

Now, fruit stall owners will get enough money for the expansion of their fruit stalls. If the company makes lots of profits in the future, the shares price increases accordingly.

If the buyers have taken one share worth 500 rupees at the initial stages. Now, the share price rose to 1000 rupees per share then buyers can sell the share can make a profit of 500.

stock market works in this manner. This might be the simple and perfect answer to What is share market? question.

NOTE: 

Here we have taken the example of a fruit stall. But in reality, this small business can’t make it to the stock market.

To understand the share market working we have taken a simple example.

Share Market Basic knowledge

Now you have understood the logic of the share market. Here, one will understand the logic behind the investment.

The return solely depends on the performance of the company. If the company grows, then your share price will also rise.

All the profitable companies are not mandatory to be in the share market. Even loss-making companies can take part in the stock market. 

Recently, Zomato online food delivery giant has listed in the Share market to raise nearly 7000 crores from the public. Even though, Zomato is under losses it raising money for future expansion and plans.

If the people believe in the company and trust to become profitable in future. The investors will invest and buy the shares of the company.

So, even trust and a clear understanding of the company will also matter. 

Also Read: Swiggy Startup Success

Why invest in the stocks

In this competitive world, one cannot make a huge sum to lead a luxury lifestyle. Doing the job can hardly let you lead your life in a costly environment.

Money is oxygen to live. So, to make money everyone is striving all day long. But traditionally earning money won’t’ benefit the future.

So, you have to look for other ways to make money. Here comes, share market. One can make huge profits in the stocks if he knows 

1. How to Invest in Share Market
2. Looking of Long term goals
3. Stock Market fundamentals

These factors enhance the chances of making huge profits in the Stock market.

Another factor triggers to invest in the Share Market is Inflation. Inflation is also increasing year on year. This makes the situation worst. 

Inflation examples

1. Now petrol price rose more than 100
2. Even cooking oil prices have become 2X
3. Cylinder prices are about to touch 1000 rupees.

To cope with all these rising prices of commodities, passive income is necessary. One cannot bear all the expenses with his or her salary.

Now, it is the right time to invest in the share market. There are tons of youtube channels to learn about the share market. Resources are plenty only thing is one has to take time and start learning.

This might be a simple and comprehensive understanding of the Stock Market. I think have got the answer to the question

• What is Share Market?

For beginners 

• Start trading with small investments understands the market well. Then start to invest accordingly.
• Don’t trust third-party agents. There might be chances of fraud. Even one of my close relatives has lost nearly 10 lakhs in a scam of a third-party agent.