10 Most Asked Questions In The Stock Market

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Whether you have invested in stocks or you are planning to do so, you may have realised that the world of investment is a complex one that revolves around stock markets. The stock markets are designated places where shares and securities are sold and bought. 

The three pivots on which the stock market exists are the publicly-listed companies, investors, and the regulators. To make you understand better, here are the ten most asked stock market questions and their answers.

Additional Read: Share Market

Highlights

  • FAQs about the stock market
  • How to trade on the stock market
  • Types of stocks
  • Stock market timing
  • Bear and bull market

How can I trade in the stock market? 

This is an often-asked stock market question. To begin trading in the stock market you need to begin by having a trading account which you can use to buy stocks and a demat account which is used to store the purchased stocks. To purchase a stock you must be focussed on your investment goals and objectives and also have a clear assessment of the risk. Once you have pictured these objectives and assessments for yourself, you are good to go. 

When can I trade in the stock market?

You can buy or sell stocks and securities during working days and during work hours. Trading is not allowed on holidays and when the work hours are over. One of the keys to success in the stock market is to assess the correct time to trade the stocks; it means you should not know when to buy and when to sell the stocks to gain maximum profit at minimum risk.

Additional Read: How to Trade Risk-Free Using a Demo Account!

Should I invest in only one stock? 

A simple answer to this stock market question is never. You should never put all your investment in one stock. The best option is to diversify your investment portfolio by carefully picking a variety of stocks, different companies, different stock types, and different sectors. The diversification of the investment portfolio will minimise the risk. In case you invest in one stock, your risk profile is at the maximum as all your investment can be lost if the stock company shares trade badly or crash.

What is BSE and NSE?

There are two stock exchanges in India. The older of the two is based in Mumbai and is known as Bombay Stock Exchange (BSE). BSE was founded in 1875 and holds the distinction of being Asia’s first stock exchange. The National Stock Exchange (NSE) was incorporated in 1992. SENSEX is the stock market index for BSE while NIFTY is the stock market index for NSE.

Why do share prices go up and down? 

This stock market question should be understood by everyone who intends to invest in shares. The stock prices of companies continuously fluctuate mainly because of the principle of supply and demand. It means when there is a demand for any particular company’s shares, its price will go up. However, when there is a lack of demand, the prices will fall. This fluctuation in prices is what eventually translates into profit or loss for an investor. The demand for the stocks of a particular company can go up or fall depending on multiple factors, like the performance report of a company, merger or acquisition, change in government rules and regulations, compliance issues or misappropriation, or change in its management.

What are the different types of shares that I can trade?

There are various types of shares available for trade in the share market. The shares are classified based on their class, market capitalization, ownership, dividend payment, and sectors. Some of the types of shares are the following: 

  • Ordinary shares
  • Preference shares
  • Dividend shares
  • Bonus shares
  • Right shares
  • Mid-cap shares
  • Large-cap shares
  • Small cap shares
  • Voting shares
  • Non-voting shares

Additional Read: What are Shares - Meaning & Types of Shares

Who regulates the share market?

Share market is regulated by Securities and Exchange Board of India (SEBI).

What is a bear and bull market?

When the overall market is on a rise and stock prices are gaining, it is called a bull market. It is the right time to sell the shares to secure a profit. On the opposite, when the market is receding and stock prices are falling, it is called a bear market. It is the right time to scout and purchase stocks that can gain value once the trend reverses.

Is there a risk associated with investing in the share market?

Investing in the share market carries risks. Investors can lose money if a company's stock price falls for any reason. However, with thorough research, diversification, and a long-term strategy, the potential for growth and profit can outweigh these risks.

What is a demat account?

A demat account is a digital account where your shares and other securities are held safely in an electronic form.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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