Usually, companies sell a portion of their ownership to the public in exchange for money. Investors purchase a share of the ownership by buying shares of the company. They then become a shareholder. Company stocks are called equities.
Equities are traded on the stock market. These could be in the primary or secondary market. In the primary market, companies get listed through an Initial Public Offering. Thus, new securities are available in the primary market. In the secondary market, investors buy or sell securities, which have already been issued. Currently, more than 1300 securities are available for equity trading on the National Stock Exchange (NSE) and over 6000 on Bombay Stock Exchange (BSE).
Equity trading is very simple. All you need to do is purchase shares of a company. To do so, you need a demat and an equity trading account. You will then have to link this trading account to your savings bank account to transfer money easily for the purchase of equities.
Simple saving money and keeping it aside does not help too.
Here’s why you should invest in the stock market:
Best long-term returns: Equity investments can provide excellent long-term returns, illustrated by the chart below
Volatility is the reality of the stock market. However, the key to a successful stock market investment is in increasing the returns you get over long-term, and avoid the day-to-day fluctuations. It also helps to have a disciplined and informed approach. You will always be in control of your money.
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