Business/15. Stock Market Part 1 (What is shares_ ).
Business/15. Stock Market Part 1 (What is shares_ ).
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If you are new to the stock market, understanding shares is the first step to learning how businesses and investors make money. Let’s break it down in an easy way!
A share represents ownership in a company. When you buy a share, you become a shareholder (part-owner) of that company.
Example:
Suppose a company is worth ₹10,00,000 and issues 10,000 shares. If you buy 100 shares, you own 1% of the company.
Companies issue shares to raise money for:
Expanding their business
Launching new products
Paying off debts
In return, investors get ownership and may receive profits in two ways:
Dividends – A part of the company’s profit paid to shareholders.
Capital Gains – Selling the share at a higher price than you bought it.
Equity Shares – Common shares that give you voting rights and a share in profits.
Preference Shares – Fixed dividend shares, but usually no voting rights.
Share prices go up and down due to:
Company performance
Demand & supply in the market
Economic conditions
Global news & events
Example: If a company announces good profits, demand for its shares increases, and the share price rises!
Key Terms to Know
Stock Exchange – A marketplace where shares are bought and sold (e.g., NSE, BSE).
IPO (Initial Public Offering) – When a company sells shares to the public for the first time.
Market Capitalization – Total value of a company’s shares (Share Price × Total Shares).
Bull Market – When stock prices are rising.
Bear Market – When stock prices are falling.
Final Thoughts
Buying shares is a way to invest and grow wealth over time.
Always research before investing in any stock.
The stock market has risks, but with knowledge, you can make smart decisions!
Would you like to learn about how to invest in shares (Stock Market Part 2)?