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All about equity market and how to earn profit from shares and stocks

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All about equity market: A Primer
An equity market is a market where entities or shares of thecompany are traded and issued, either through brokers or dealers or through exchanges. If you have decided to invest in the equity market holding stocks of a particular company this implies that you own a small part of the company and so the future of the company controls the success of your investment. You lose money if the company fail to get expected success and you earn more money if the company succeeded. So there are few factors you are advised to follow to be aware of the danger before you park your capital in equities.

Equity market can be defined as the aggregation of sellers and buyers of stocks. The equity sale provides the investors a slice of ownership in a company and a company access to capital with the potential to realize profits based on the future performance of the particular company. A stock exchange is a place where stocks in the equity market are traded. The equity shares in India are traded through two stock companies that are Bombay Stock Exchange and National Stock Exchange.

Company evaluation: You are advised to go through a thorough research of the very company you have decided to invest in. it would be better if you study the shareholding pattern of the company and the sector in which it operates. Regarding this issue, the guidelines by the management in the annual report of the company can be a real help. The reports can also give necessary information about its future business ideas.

You are also required to be aware of the promoters, management directors and executives of the company. The high stake owning by the promoters implies their confidence about the future of the company. You are suggested to avoid purchasing shares of a company where promoters are having alow stake or reducing their ownership. This signifies the doubtfulness of the promoters about the future of the company.

Observe your portfolio: You are advised to keep an eye on your investment portfolio in the interval of every three months. After all, change is considered to be the only constant in the stock markets. It would be better if you go through the management commentary and the financial statements of the companies you own, thoroughly. Try selling the stock of a company that does not act well for the prolonged period of time. There are possible chances that you invest in such a company that will get eroded. So be very careful and purchase shares of a company that is performing well enough to be trusted.

Diversify your investment: Purchasing shares of companies in various sectors reduce concentration risk and supports diversify investments. Your investment will perform well only if the banking sector is indicating upward. But there are chances that you may financially bleed if it does not happen.

National Stock Exchange: (NSE) The National Stock Exchange of India was instituted by a group of leading Indian financial intuitions. It was the first exchange in India to supply a fully automated electronic trading system offering thesimple trading facility to the investors. The capital equities segments of the National Stock Exchange commenced operation in November in the year 1994 during the operations in the derivative segments commenced in June 2000. The NSE is considered to be the world’s 12th biggest stock exchange with amarket capitalization of more than US$1.41 trillion.

Bombay Stock Exchange: (BSE) Bombay Stock Exchange is an Indian Stock Exchange situated at Dalal Street Mumbai. Bombay stock exchange is said to be the world’s fastest stock exchange that owns a median trade speed of 6 microseconds. Founded in the year 1875 Bombay Stock Exchange possess an overall market capitalization of $1.83 considering it the world’s 11th biggest stock exchange.

Equity trading:In the stock market the investors desiring to purchase the share of a particular company offers a specific price. And the sellers to come with a certain price. The moment the two price matches the sale is done. In case you are planning to trade in equity market you will require a stock trading company.

Go through the above explanation for a better comprehension of the Equity market.

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