Investing in Share Market

What is Investing in the share market?

        Share market is a platform in which common people can able to buy any listed company shares or be a part of that company. When the company grows either they will give their shareholders dividend or based on their performance share price will rise. If you buy a stock at 100 RS and in 1-year share price move up to 115 RS and they gave a dividend of RS 2. Means your money is grown 15% as share price growth and 2% as dividend total of 17%. This is higher than the inflation rate of the money.

What is the risk in the share market?

        Share market is not only for common men. There are many top players like Foreign investors, Domestic Investors, some big market players, and finally Retail investors. When a pandemic like a corona or any other bad news hits, these big investors take their money back from the market and will put those big number of shares in the market and make it down. In that case, traders(Who buy and sell stock on the same day) may face heavy losses and most of these people say the stock market risk and will destroy all your money.

        There are a lot of people in the sharemarket making a lot of money and the reason for their success is their patience. They gave enough time for their money to grow. If you think you can make money in share market without doing any research, the Share market is very risky. Because you are not investing you are just doing gambling on the market.

How to invest in the share market without risk?

        Share market will always have risk. Investors or traders should be cautious about what they are doing. They need to know why they are buying that stock needs to check what the company is doing, how they are progressing, and to know about their debt. The important thing is to wait patiently for the long term. Most of the long-term investors have not faced any major loss in their capital. If you are not willing to know about the market, invest in gold or invest in mutual funds.

Key points to note while investing in the share market

1. The investor should have knowledge of the company's business and its fundamentals
2. Need to compare company performance with its share price and check whether share price justifies companies performance. If the share price is lower than company performance means that the company is undervalued in the market and the share price is not justified by the companies performance.
3. Need to buy the share at the correct price

We will discuss the above point in upcoming articles in detail.

Hope this article was helpful.

Disclaimer: This is my personal thoughts and doesn't consider this as investment advice. Please do your research and consult with your financial advisor.