In simple Words, a share or stock is a document issued by a company, which
entitles its holder to be one of the owners of the company. A share is issued
by a company or can be purchased from the stock market.
In simple Words, a share or stock is a document issued by a
company, which entitles its holder to be one of the owners of the company. A
share is issued by a company or can be purchased from the stock market.
By owning a share you can earn a portion and selling shares you get capital gain. So, your return is the dividend plus the
capital gain. However, you also run a risk of making a capital loss if you have
sold theshare at a price below your buying
price.
A company’s
stock price reflects what investors think about the stock,
not necessarily what the company is “worth.” For example, companies that are
growing quickly often trade at a higher price than the company might currently
be “worth.” Stock prices are also affected by all forms of company and market
news. Publicly traded companies are required to report quarterly on their
financial status and earnings. Market forces and general investor opinions can
also affect share price.
Quick Facts on Stocks and Shares
·
Owning a stock or
a share means you are a partial owner of the company, and you get voting rights
in certain company issues
·
Over the long run,
stocks have historically averaged about 10% annual returns However, stocks
offer no
guarantee of any returns and can lose value, even in the long run
guarantee of any returns and can lose value, even in the long run
·
Investments in
stocks can generate returns through dividends, even if the price
How does one trade in shares ?
Every transaction in the stock exchange is carried out through licensed
members called brokers.
To trade in shares, you have to approach a broker
However, since most stock
exchange brokers deal in very high volumes, they generally do
not entertain small investors. These brokers have a network of
sub-brokers who provide them with orders.The general
investors should identify a sub-broker for regular trading in shares and place his order for purchase and sale through the sub-broker.
The sub/broker will transmit the order to his broker who will
then execute it .
What are active Shares ?
Shares in which there are frequent and day-to-day dealings, as distinguished from
partly active shares in which dealings are not so frequent. Most shares of leading companies would be active, particularly those which are sensitive to
economic and political events and are, therefore, subject to sudden price
movements. Some market analysts would define active shares as
those which are bought and sold at least three times a week. Easy to buy or sell.
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