Hello reader's,hope you have understood all the previous topics of Investment, now this blog will primivily focus on Share market ,new investment opportunities and business news , news analysis, impact of news to investors , big economical deals happening worldwide , in a word everything related to money.
So starting from very hot-shot topic stock market aka share market . Share market is a wide topic which can not be covered in few blogs . So this blog is about
So starting from very hot-shot topic stock market aka share market . Share market is a wide topic which can not be covered in few blogs . So this blog is about
HOW STOCK MARKET CAME INTO EXISTENCE or HOW STOCK MARKET IS STARTED AND WHY
Mastering in stock market is game of understanding basics and fundamentals. To learn from stock market or to earn from stock market you have to firstly understand that how this share market or stock Market came into existence or what is past of stock market , what is history behind this industry or we can say that need ,which created that stock market.
Here I am not talking about history or registration dates, name of first organized stock brokerage firm because we don't have to give any exam we just have to learn from it. We just have to understand is how that system become a need, does this exist in past time ,what are its basics.
So business is a thing which man is going since he is civilized .More funds has been always a need to run or expand any business or project .
the money requirments in any business or project can not be fulfilled by single person . single person is capable of investing a limited amount of money
A group of peoples are required to get a certain requirement of target money . larger money requirments in any business or project can not be fulfilled by single person. a group of investor or shareholders (in terms of investing) requires to complete fund requirments.
For example assume you have 4lakh bank balance and you want to buy or open paperbag maing machine business which costs 10 lakhs INR .You are in need of 6 lakh INR more do you take 1-1 lakh ruppess from 6 family members . This can be termed as your family share marktet in which you take 6 lakh ruppess by share pattern .
Investors buys a part of company's or business capital .Investors money is used in running and expanding business and company gives a part of profit to investors on regular basis . Investors or shareholders can also sell their investment amount with all rights to other person in same price as he bought or in higher price. If any buyer have positive interest in growth of company he bids for higher price .
So basically stock market is investing someone's business or owning capital part of business.
Let us understand this system by taking an example to understand it better . Assume you have started a unique type of restaurent , bar or something food based industry with an investment of 30 lakh rupees of your own then due to food quality - suffocation and other facilities your restaurent become a brand that everyone and remembers in city and have a good image in peoples of city and it become profitable in three yers .Now you want to scale up your business and want to open 20 more restaurents in diffrent locations of your city and nearby cities . Calculation part is that for opening 20 restaurents you will need 20 * 30 lakh per restaurent that is 6 crore rupees. Need of share market system feels which can let people with money to invest in someone others business . You make your company public and invite investors or peoples's intrested in your business's profit to invest in your restaurent chain. So you collect a sum of 6 crores rupees from investors , family help , bank loans and your own money . After collecting funds and etablishing your restaurent with proper markting , business location , staff etc. Assume all restaurants are in profit so we have to share profit's part to investors too. Investors can also sell their shares to other investors on same amount or on diffrent price . Basically health of your business will decide price of shares .
So basic of stock market comes from need of money to scalize any business or any project . The people with excess of money invests in business's , actually stock market is win win game for economy as well as investors and business owners. Investors got a instrument to increase money value by investing money business without any hassle of running business and on other side business owner get money to make his business worldwide to increase net worth.
In summary need of multiple investors in any business created stock market system.
So i hope you have understood how stock market is started and why
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In next blog we will analyse some news or will talk about modern stock market system .
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