Stock Market is a platform where buying and selling of shares takes place between the parties. The various securities traded in the market can be shares, bonds, derivatives and many more. It is a platform where one is profited and the another is at a loss.
The stock market mechanism is determined by various factors such as media, opinions of the investor, demand and supply, political uncertainty, social risk. These factors create a certain type of fluctuations and on the number of buyer and seller. Hence where there are more sellers than the buyers, the stock price tend to fall whereas if there are more buyers than the sellers, the stock prices tend to rise.
One who is investing in stock market must have a knowledge fairly where it must suit to invest its money. The investor can invest its fund in stock market either long term basis or short-term basis. If it wishes to invest in short term basis it can go for shares whereas if it decides to invest for a long term, then the best suitable option is preferable government bonds. The performance of the stock market is very important as it directly links to the smooth functioning of the organisation.
The investment in equity shares can be said to be fairly risky as it is highly uncertain. Thus, the investment in equity shares are termed as “High Risk High Return Investments”. The purchase of stock plays in two ways :1. Where the stock is purchased to be sold at a higher price and thus make profits 2. Where the stock is purchased but its time is small and is sold when there is a fall in the price of the purchased share.
There are many financial institutions where the purchase of securities can take place where an individual investor does believe to have a good comprehensive knowledge on the volatility of the market. Since we are versed with the pandemic crisis at this point resulting in a great volatility in the prices of the securities enabling the market to be at great heights.
Thus, one has to have a fair share of its knowledge on the term of investment as well as the type of investment. Since it is a risky market where profit and loss is predicted on the basis of the information and its goodwill, thus one has to ensure to be well prepared of the uptrends and downtrends in the market due to changes by the demand of market forces.
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