Share Market 101 – Understanding how the stock market works

Share Market 101


The stock market can be a little daunting for the uninitiated, but you needn’t be a financial whiz to start investing in stocks. With a little basic education and the right tools, anyone can invest in the stock market successfully.

What is the Stock Market?

The stock market, also known as the equity market or share market, is a collective term for the buying and selling of publicly traded stocks (also known as shares) which represent ownership in a company. The stock market serves primarily two purposes: raising Capital for companies and providing a marketplace for investors to trade in the shares of the listed companies.

The stock market, also known as the equity market or share market, is a complex system that enables the buying and selling of publicly traded company shares through a stock exchange. It is the backbone of the global economy and plays a significant role in channelling funds from investors to companies in need of capital.

When a company goes public, it issues shares that represent ownership in the company, which are sold to the public. These shares are then traded among investors in the secondary market (the stock exchange), allowing for the buying and selling of stocks.

The stock market is essential to an economy’s health and plays a pivotal role in determining the financial well-being of businesses and individuals. As investors buy and sell shares, the value of these companies is reflected in the stock market’s overall performance. Investors buy shares of companies at a lower price and sell them later at a higher price to make a profit, thus contributing to the economy by creating wealth.

Stock markets provide a platform for various businesses to raise capital for expanding and further developing their business operations. The funds raised through initial public offerings (IPOs) are used to finance the upgrading of plants, purchase new machinery, build new facilities, and undertake research and development. These investments can lead to employment opportunities, higher incomes, and a more robust economy.

The stock market also plays a crucial role in providing liquidity to investors. When an investor invests their money in a company’s stock, they do so with the hope that the value of the stock will increase in the future, and they will earn a profit upon selling those shares. The stock market provides this facility by allowing the sale and purchase of shares at any point in time.

Stock markets operate on a supply and demand principle. The demand for shares of a particular company increases when investors feel optimistic about the company’s prospects, which results in a rise in the stock price. Conversely, when investors lose confidence in a company, they sell their shares, which increases the supply, leading to a decline in the stock’s price.

There are two main types of stock markets: primary and secondary. The primary market is where companies issue their shares for the first time through an IPO. The secondary market is where investors buy and sell already-issued shares of companies listed on the stock exchange.

A stock exchange is a market where buyers and sellers of stocks come together and trade the shares. The stock exchange offers various services and facilities like order matching, price discovery, and market information dissemination.

Different types of investors participate in the stock exchange, such as individual investors, institutional investors, and foreign investors. Institutional investors usually control a large amount of capital and invest in stocks on behalf of a group rather than individuals.

Advantages of Investing in Stocks

One of the biggest advantages of investing in stocks is the potential for high returns. Historically, over the long term, the stock market has outperformed other forms of investment such as fixed deposits or bonds. Additionally, buying stocks allows you to invest in companies you believe in, ride on their growth story and participate in their profits via dividends.

Stock Market Investment and How It Works

When you buy shares in a company, you become a part-owner in that business. The value of your shares will fluctuate over time based on how much other investors are willing to pay for them. This price is determined by the company’s performance, strategic direction, market conditions, and changes in overall economic prospects. If the company performs well, the value of your shares is likely to rise, and vice versa.

Different stock market apps offer different features, but no 1 stock market app is the most comprehensive platform to invest in stocks. These mobile applications offer one-click buying and selling of stocks, advanced charting, technical analysis, the latest news, and expert insights. With the help of these apps, you can make informed investment decisions and manage your portfolio with ease.

Who Should Invest in Stocks?

Anyone can invest in the stock market if they have the time and resources. However, people with a long-term investment strategy and a high-risk tolerance are more likely to reap the benefits of investing in stocks. It’s important to note that investing in the stock market comes with some degree of risk, and investors should be prepared to stomach losses as well as gains.

Bajaj Finserv App: The perfect platform for investing in Stocks

One of the best stock market apps for beginners is the Bajaj Finserv App. The app offers features like market news, real-time stock quotes, one-click order placement, and advanced charting tools. You can easily monitor your investments and manage your portfolio on the go. The app also offers recommendations from market experts, making investment decisions easier for novice investors.

Stock Market Prediction App: Get your Investment decisions right

Another app that could be beneficial for investors is a stock market prediction app. These apps use advanced algorithms to predict future trends and help investors make informed decisions. While these are not foolproof, and the stock market can be unpredictable, the insights provided by these apps can be useful for investors in developing a strategic approach to their investments.


Investing in the stock market may be intimidating for some, but it is a great way to grow wealth over the long term. With a little education and the right tools, anyone can invest successfully. The Bajaj Finserv app offers an excellent platform for managing your investments while keeping track of the latest market trends and expert insights. Additionally, the insights and predictions provided by stock market prediction apps can be useful in developing a long-term strategy.

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