What is Share Market and How to invest in it ?
We all hear, read about, talk about Stock Markets in our day-to-day life but today let’s dive deep into what this platform is?
What is a Share Market?
A platform for buying and selling of shares of publicly listed companies on the stock exchange.
Its Popular synonyms are Bourses, Equity Market, Equities and Share Bazaar
Such bourses operate in 2 segments:
A platform for the companies which wish to offer shares to public for subscription, come with their Initial Public Offering (IPO) and raise capital for expansion.
A platform for the companies to get listed with the exchange after floating the IPO and shares are available for trade and investment.
Both above segments in India are governed by the regulatory body called Securities & Exchange Board of India (SEBI).
How to Invest – Direct or Indirect route?
The answer is simple –
If one has the right knowledge, capacity, ability and skill to research different aspects related to investments in equities, then direct investment in various stocks is the option.
If one has very little amount to invest and do not possess relevant knowledge and skills, the mutual fund route makes sense while investing in equities which is managed by active, skilled and expert fund managers.
Other than Mutual Funds, Exchange-Traded-Funds (ETF) are also a source of Indirect Investment in securities which are traded on the exchange. Simply put ETFs are the mutual funds that one can buy and sell in real time with the prices that change throughout the day
To untap the potential of any economy and benefit out of investing in it, there is no option bigger and better than Equities.