Introduction to stock markets

-
What is share/stock?
A share

What is stock market?
Stock market is the place where the fractions of companies ownership is transferred from buyer to seller.

In India share market is still considered as a luxury to many of the individuals. Around 55 percentage of Americans have access to stock market according to latest data available in statista.com. Compare that with india, mere 2% of total population. This 2% has been achieved because pandemic situation which caused lockdown made millienial enthusiasts to open a trading account.
The overall penetration is low, and as an individual investor, that's a good news for me, as more and more people get in, there will be more demand to existing shares and as demand increases and supply remains constant, stock value increases. This is assumed by not taking fundamentals of the company into account, if that is also included then there will be multiple drivers for the stock price to go up and make you wealth.

Comments

Post a Comment

Popular posts from this blog

Evolution of Money - Barter system

-
Image
As Humans have evolved over time, Money we transact in exchange of goods or service is also evolved. We will see in detail why was there need to go other system. Barter System: Barter System was in use as early as 6000 BC introduced by Mesopotamia and it was improved by Babylonian's. Bartering is trading services or goods with another person when there is no money involved. If you ever traded 'abc' object in return of 'xyz' object, you have bartered. Advantages: You dont need money to barter. you do not have to part with material items. Instead, you can offer a service in exchange for an item It is flexible. Anything can be traded for anything.  Disadvantages: The desired item only has the value in this medium of exchange. For example, you desired to have apple, you will transact only with the person who is willing to exchange apple. Item exchanged is not quantifiable. Example: 10 apples cant be traded for a single sheep/goat. It was long tedious process...
Read more

Unfair Investment world

-
Image
If I tell you that investing is all about roses and sunshine then I would be lying. This article will tell you how unfair investment world is. Charlie munger, the second man whom I admire most after Warren buffet, once said that to be successful you just don't have to be stupid. They achieved this by sticking to their circle of competence . The advice can be applied to the stock market investing. To be successful in investing, you need to avoid big losses. Risk management is important when you are putting your hard earned money at stake. Let me put what I mean through numbers. Numbers won't lie and this truth has been hidden from most of the retail investors. If you lose 10% of your investment, you need 11% of the returns just to breakeven(no loss, no gain). And this keeps getting worse as the loss percentage increases. For 25% loss in your portfolio, your investments should return 33.33% to breakeven. A 50% drop in your portfolio should provide 100% return to break...
Read more