Basics of Stock Market | How to invest in stock market for beginners

Basics of Stock Market | How to invest in stock market for beginners

Basics of Stock Market | How to invest in stock market for beginners: In this Article you'll learn the Basics of stock market for beginners and Become to familiar with stock market and your all fear will be vanished after reading that so read it fully. 

Through this article a Kid can also Understand Stock market. Stock Market Or Share market is a platform in which you trade or invest your money on other Businesses to get returns from that and multiply your money.

Busting the Myths of Stock Market

There are total 4 Myths about Stock market that makes people stay away from stock market. 

Stock market is not the game of luck but of Understandings of the market.

1. Investment in stocks are very Risky

People think that investment in stocks are very risk but it is not true.

If you see the graph of Index funds in Stock market from 1996 to 2016, There are many Up and downs in the market but overall it is Growing.


Warren Buffett ( The World's best investor) said that You didn't need any knowledge about Stock market to invest for a Long term. 

It means that if you invest your money for a long time then it always increases. 

If you invested 300 rs. In 1996 then today you have 30,000 Rs. 

That's the magic of Stock market.

2. You need to have a very Strong knowledge about finance

Mr. Porinju veliyath is one of the biggest investor of India is Law Graduate.

Mr. Ramesh Damani have 1.24 Billion dollar is a HR Specialisation and the best thing is that Mr. Radhakishan damani with networth of 7.1 Billion Dollar is a Undergraduate.

And Mr. rakesh jhunjhunwala who is the Second warren Buffet have a degree of CA but he says that Mr. radhakrishna Damani is his Mentor😂. 

This proves that you didn't need any Strong knowledge about finance. 

If you think undergraduate is very Intelligent then you need to know that Warren Buffett started his Investments when he was 11 Year old and He said 'I am very upset that I started Investment in Stocks too late'. 🤣🤣.

3. Basics of stock market

• We get Interest in FDs and Dividends on Shares (Simply Interest of stocks is known as Dividends)

•LTCG ( Long term Capital Gain) :- If a person holds share for more than 1 Year and earns profit, it is known as LTCG.

•Dividend:- Return on Investment in Shares

• It is the Company's decision whatever to give Dividend or not ( Yes may company Denies)

• Dividends and LTCG are Tax Free for Individuals.

Home work for you:- If You earn 100 Crore dividends/LTCG is it Tax free? Or in 1 Lakh? Comment Your Answer or comment me for answer.

•Face Value:- The actual price of product/share

•Promoter is a person who starts the company

•Watch CNBC TV Channel after Business Hours.

3. Small Investors like me cannot make money from the stock market. You need lots of money to invest in stock Market

The above line is Imaginary and didn't have any connection with real world 😂.

Mr. Porinju Veliyath

Source: https://i.ytimg.com/vi/2j_JTnsnNcA/maxresdefault.jpg

Do you know Mr. Porinju Veliyath?

Come on! we talked about him above.

 
•He comes from a very poor Family is Kerala, India
•Struggled for education due to Financial condition
•Joined telecom exchanged as an operator

Think how much he afford to buy stocks?, He is not from a middle class family, he was below poverty line. 

He used the Technique that buy the shares of company which is undervalued and sell shares when it achieves actual value then sell it.

For Joining school his father sells a piece of land of his small home, Then when he become A successful billionaire he Came back to his Village and Bought his Land Again with All Nearby Lands, His dialogue he said to land lender is 'You tell Money, I tell how much Land'.

Porinju Veliyath Farmhouse

Today he have a Farmhouse in this land. 

This is the power of Share Market. 

So You can Start with Very small investments and then increase them time to time with your earnings.

4. Renowned Companies can never Give strong returns

Seriously?, Companies that are renowned has more chances to produce more returns because company who bought that has a vision for that.

Now some points to remember is:-

•Turnover means Top line (How much products sell) and Profit means Bottom line (How much profit gain)

 
•No. Of shares will increase proportionally is known as Stock Split.

Eg. Original Face value is 2 and No. Of shares is 50,000

Revised Face Value is 1 so that No. Of share become 100000.

There's no need to afraid when stock split happens on a company because The Face value decreased and The Cost of Shares you Contain remains same.

Wait for the Next part Of this Article, Are you excited for next part?. 

Next part includes too much Knowledge, Tricks and so on so Don't miss it. Thanks for Reading Enrich Success.

Part 2: Basics of Share Market | MUST READ