November 25, 2025
13 mins read
Shares represent small portions of ownership in a business. When you purchase an individual share, you own a small piece of that business. In other words, you are entitled to a share of the profits and maybe even a vote in some matters. For companies, offering shares is a way to raise money for expansion or new initiatives. For investors like us, shares can create wealth for us, albeit at some level of risk.
There are two primary types of shares, equity shares and preference shares.
The primary means of investment is a Demat Account. This type of account maintains your shares electronically and allows for easy buying and selling on stock exchanges. Share prices fluctuate daily, based on profit performance, market demand, and the economy.
As an example company you might invest in offers (and issues) 100,000 shares for sale, and you buy 1,000. That would give you an ownership stake of 1% of that business. Should the value of that company increase over a period of time, you would also gain investment returns, very simple and really powerful.
There is a small difference between "shares" and "stocks," but most people use them interchangeably.
A business that provides stock splits it up into many shares. These are bought and sold on markets like the Nifty 50 and the BSE Sensex. When you own shares, you have rights, like getting income and making money if the price goes up. But prices can go down too, so it's important to know what's going on.
Shares can be grouped in several ways — mainly by ownership rights, dividend patterns, or how they behave in the market. Think of them as different “flavours” of ownership, each serving a particular kind of investor. Let’s look at the key types you’ll come across:
Each of these share types serves a unique purpose. Some appeal to investors chasing steady income, while others attract those looking for growth or influence. Knowing which type fits your goals makes investing a little less mysterious — and a lot more personal.
Additional Read: Types of shares
Prices for shares never stay the same. Lots of things can make them move, like news about the company, the mood of investors, or events in the economy. This is what usually makes them unhappy:
When you understand these, you can understand why share prices go up and down. Each change has a story to tell.
It's easier to buy and sell stocks once you know the steps.
To pay for shares, make sure you have enough money in your buying account.
Long-term buyers look for steady growth over time, while short-term traders may like intraday trading for quick gains.
Organisations issue shares primarily to generate finances for expansion and development. Here are some reasons for issuance:
Organisations, by issuing shares, also simultaneously gain valuable funding and even relationships with the investors to support their future growth strategy.
Investing in shares is an appealing way to make money, and here is why many people want to buy shares:
Monitoring the way shares behave allows investors to make educated decisions. Performance Indicators of Share Prices
Performance indicators would include:
Often, the health of the business can facilitate the movement of the share's price. Look at the debt load, profit margins and quarterly results. When there is steady progress, both individual and institutional investors tend to come together.
Even big, strong companies change with the times. For instance, IT shares may go up when more people use digital tools. But if sales of cars go down, auto stocks might too.
It is important for investors. Prices can go up or down depending on the news or reviews. Bad news can bring prices down. Markets are affected by things like inflation, GDP growth, and changes in interest rates. Share prices often move quickly when these things change.
News about a company, like new products, partnerships, or changes in leadership, can make prices change quickly. A great new product can boost trust, but problems with the law or management can lower it.
It's fun and profitable to own shares, but there are also risks. Prices change with the market and how well a company does, and when the market goes down, value can go down too. Shares don't promise returns like fixed-income options do. Awareness of the risks can inform your decisions:
If you do have a long-term horizon and dollar-cost average your purchases, you can minimise or reduce some of these risks.
Investments in shares are at the heart of today’s investing landscape. They provide access to capital appreciation, income, and diversification, but markets are also unpredictable. Ultimately, your best tools in navigating markets are conducting good research, applying patience, and being aware. Be sure to consider your goals, be aware of potential risk, and obtain knowledge. Through good planning with your Demat Account, investing can be a manageable and meaningful experience.
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Shares represent ownership in a company, entitling shareholders to dividends, voting rights, and potential capital appreciation. To trade shares, investors must Open Demat Account and link it to a brokerage platform. Share prices fluctuate based on factors like BSE Sensex, company performance, and market sentiment.
If an investor buys 100 shares of XYZ Ltd. at ₹500 each, they invest ₹50,000. Share value fluctuates based on Nifty 50 Price trends and market factors. Investors can sell shares for a profit, receive dividends, or use Margin Trading Facility (MTF) for leveraged trades.
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