Stock market is an enigma for lot of people. The reasons are abundant. Though people have got some extra money to invest,
the risk of losing money keeps them away from the stock market. For the well-informed medium term and long term investor, it is one of the best places to park the money.This article tries to unfold the complexities of the stock market in simple terms. A stock market is a place where the companies list the shares,
debentures and bonds from a face value of Rs.1 to Rs.10 per share. A debenture is a term deposit held with the company that either assures a fixed rate of return or can be
subsequently converted to a share after the tenure. Bond is an instrument usually having a face value of Rs.1000/- or more, which would earn a fixed interest, which will subsequently be repurchased by the company after a minimum lock-in period. These instruments can be bought and sold just like any other goods on the stock exchange. With vast development in technology, trading on the stock exchanges has become so simple that you can buy and sell with the click of a mouse. When the technology was in nascent stage, stockbroker was the mediator for trading the shares on the stock exchanges and the shares were held in physical form. Now, the trend is to have a custodian who will store the shares purchased by the investor in electronic form or demats form. Any person who can set aside a minimum of 1000 bucks a month on the average for a period of 5 years can earn huge profits in the stock markets, and we will see how it goes about in my next article.
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