STOCK INVESTMENT
A stock represents the ownership certificate of a brand, while a share represents the stock certificate of a brand. Buying or Holding a brands share/s enlists you as a shareholder. Thus, investing or buying stocks is a great way to multiply your income.
Stock market is a heaven for long term investors, even during market volatility. The fall of a market usually represents stock investments sale.
Stocks can be differentiated within two categories: Common and Preferred
- Common enables proprietors to poll at shareholder meetings to receive dividends
- Preferred stockholders don’t have voting rights but receive dividend payments before stockholders, and in case of bankruptcy are given priority over common stockholders
What is a Share?
Shares are units of ownership of a part of the company’s value in proportion of the capital invested. It is a direct investment to own a set percentage of the company and any investor can thus become a share-holder/stock-holder.
How Shares help an individual to earn money?
Ideally, people buy shares at a lower price and sell them when the market rises- for a capital gain. However, there are two types of investors, a stock investor and a stock trader.
- Stock Investors keep the stock for a longer period of time as returns get compounded over years. These investors analyse the trajectory of stocks and invest accordingly.
- Stock Traders buy and sell in short terms, mostly in the same trading session. They use technical analysis and are more interested in short and quick gains.
Investing in the Stock Market
To start investing in stock market the first step is to get a trading or Demat account opened with the help of your banking partner. Most if not all banks offer this facility free of cost.
The next step is to understand that one cannot buy or sell in the stock market directly, the market has authorised brokers or companies that share a platform for your convenience in return of a very small fee, which is usually a percentage of your transactions.
The platform provided by the broker companies can also help an individual with the Demat account formalities, and then link it to your bank account. The process mostly involves KYC documentation, and proofs of identification along with the Pan Card. Most platforms offer online KYC documentations allowing individual investors to have an easy mode of convenience.