Know The Market(Session-2)

Grey Areas in Equity-

• Equity markets are different to understand, interpret and price movements.
• Day to day, Week to week share price movements are governed by rumors, gossips, tips, misinformation, crowd behavior, mass psychology and knee jerk reactions to news and headlines.

Equity markets are highly volatile and Unpredictable-

• Markets are globally interlinked and a weak global market will result in weakness across the globe.
• The market price of any equity share has a wide variation.

Q- What are the risks involved in investing in shares?

Ans- One of the main aim of hold the shares of a particular company is to get the Dividend, but here is the some cases-

    1.Unstable Dividend-

• The dividend which a shareholder receives is neither fixed nor controllable by him.
• The management of the company decides how much dividend should be given.
• Dividends depends on profits made by the company which intern depends on the performance of the company and its competitive position.
• Government policies can impact stock prices deeply.
• The money is invested based on the expectation of good returns an investor has in the company. There is no collateral security attached with it.
• A investor always think that how can they get higher return, for getting higher return the investor must have the knowledge about the market and must make some research about the company which share can they buy. That means you can hope to do your research properly because there is no guarantee given by the company to you get the higher return.

    2. There is lots of Lack of Professional Guidance, when you start investing in stock market. That also hampers to get higher return or making money.That also hampers to get higher return or making money, stock market is all about making good money.

     3. Close supervision of performance of the market.

    4. The stock market investing is not so scary as normal people think, it is so easier when you understand the market as properly. As i previously said market is everything.

Q- How to start stock investing?

Ans- You need 3 types of accounts.

1. Trading Account ( to place buy/sell orders)

2. Demat Account (to hold your shares in dematerialized form. It is a type of bank account to hold the shares, in bank account you hold money and in Deamt account you hold the shares.)

3. Bank Account (for money transfer)

Trading Account-

Trading account is opened with any of the NSE/BSE stock exchange registered stock broker. It is used for placing orders to buy/sell shares.

Demat Account-

Demat account where shares are held in a dematerialized form electronically. The Demat account is required to receive/transfer shares when you buy/sell through your trading account.

Bank Account-

Regular bank account should be linked to trading account, for transferring/receiving the money when you buy/sell shares through trading account.

Requirements to open Demat and Trading account-

• Fill up the account opening form of NSE/BSE registered stock broker. The broker will help you to fill the form.
• Fill up the KYC form provided by the stock broker.
• Attach the required documents- identity proof or any address proof.
• You need the PAN card during account opening.
• A cancelled cheque of the bank account you want to link to the trading account.
• Passphoto.

Q- What should look for when opening a Demat/Trading account?

Ans-

• You must look about the reputation of the broking firm.
• Service quality of the broking firm.
• Account opening charges : A fee charged at the time of opening demat and trading account.(Some broker provided it free of cost but some are not.)
• Account Maintenance Charges : An annual fee charged to maintain demat & trading account.
• Brokerage charges for transactions : Fee charged by the broker for the transactions made. It is max. .05% per transaction.( the charges are rendered from broker to broker and it is also depends upon the volume.)
• Other charges : Apart from the brokerage charges, an investor will be liable for the payment of Securities Transaction Tax(STT), Service Tax and other charges(for the services provided by the brokers such as online trading, service standard for call and trade facility.

Q- What are the advantages of opening a trading and demat account with in a same bank?

Ans-

• Bank offers 3-in-1 accounts that combine banking,demat,trading account, that are linked to each other to ensure a completely seamless mechanism for trading.
  
• Example : there is a smooth and real time transfer of money to and from your bank account.
• Brokerage charges are slightly higher than specialized stock brokerage firms with banks, unless you are a regular/heavy volume trader, it does not make much difference.
• For high volume traders, there are many specialized stock brokers to choose from.
• Specialized broking firm will typically provided with a demat account and a trading account. The trading account is then linked to bank account for transfer of funds.
• In this case, the transfer of funds may not be real time and can take sometime.(But most of the broker tired up with the bank, it is possible in some minutes of time.)

---Thank You---

1. Know The Market - Session-1 

2. Know The Market - Session-2

3. Know The Market - Session-3

4. Know The Market-  Session-4

5. Know The Market-  Session-5

6. Know The Market-  Session-6

7. Know The Market-  Session-7

8. Know The Market-  Session-8