Stock Market For Beginners India :
If You Are New To Stock Market And Don’t Know What It Is And How It Works. Then You Have Came To Right Place, In This Article(Stock Market For Beginners India) you Are Going To Learn About The Birth Of the Stock Market, What Is Stock Market ?, How Does Stock Market Works ?, Demand And Supply.
Birth Of Stock Market :
In The 1600s, The Dutch East India Company Employed Hundreds Of Ships To Trade Gold, Spices, And Silks Around The World.
But Running this Massive Operation Wasn’t Cheap. To Fund Their Expensive Voyages(long journey involving travel by sea), The Company Turned To Private Citizens. Individuals Who Could Invest Money To Support The Trip In Exchange For A Share Of the Ships Profits.
This Practice Allowed The Company To Afford Even Grander Voyages, Increasing Profits For Both Themselves And Their Investors.
Selling Those Shares For Individuals at Shipping Ports And Shops Across The Continent.
The Dutch East India Company Unknowingly Invented The Worlds First Stock Market.
What Is Stock Market ? [ Stock Market For Beginners India ]
Let Us Imagine A Company, The Company Is Doing Well And Making Profits Regularly, So Now The Company Wants To Expand Its Operations And Business To Several Locations. To Expand The Business The Company Needs Lot Of Funds Or Money.
This Is Where The Stock Market Comes In. The Companies Sell Their Shares( We Can Call Them As Shares Or Stocks) Through An Initial Public Offering (IPO).
This Launches The Company Onto The Official Public Market Where Any Company Or The Individuals Who Believe The Business Would Be Profitable Can Buy The Shares Of The Company. Buying Shares Makes Those Investors Partial Owners In The Company.
How Stock Market Works ? [ Stock Market For Beginners India ]
This Investment Helps The Company To grow And As Becomes More Profitable And Successful. When The Company Becomes More Profitable Or Successful More Buyers Will Show Interest And Start Buying The shares.
So Automatically The Demand For Those Shares Increases, So Does The Price, Increasing The Price For New Buyers And Raising The Value Of the Companies Shares People Have Already Owned.
This Increased Interest Helps Company To Fund New Initiatives And Also Boosts Its Overall Market Value.
However, If For Some Reason If A Company Doesn’t Make Good Profits The Reverse Can Also Happen.
If Investors Think their Stock Value Is Going To Decline Or The Company Is Not Doing Well, They Sell Their Stocks With The Hopes Of Making A Profit Before The company Losses More Value.
As Stocks Are Sold And Demand For The Stock Goes Down.
The Stock Price Falls, And With It, The Company Market Value Also Falls.
Demand And Supply
This Supply and Demand Is Impacted By Many Factors.
Companies Are Under The Unavoidable Influences Of Market Forces. Such As Fluctuating Prices Of Materials, Changes In Production Technology, And Shifting Cost Of Labor.
Investors Maybe Worried About changes Of Leadership, Bad Profitability Or Larger Factors Like New Laws Or Policies Which will disturb The Companies Profitability.
The Stock Market Is Composed Of Millions Of Investors Who All Feel Different Ways About A Company, They All Make Independent Choices Result In Positive Or Negative Movement Of A Stock.
If More People Wants To Buy Shares Then The Price Will Increase Due To High Demand And Low supply.
If More People Wants To Sell The shares Then The Price Will Decrease Due To Low Demand And High Supply.