OVERVIEW OF INVESTING IN

SHARE MARKET
WHAT IS SHARE MARKET AND INVESTING ?
SHARE MARKET IS THE PLACE WHERE INDIVDUAL OR GROUP OF PEOPLE BUY AND SELL
SHARES OF DIFFERENT COMPANIES WITH THE INTENTION OF MAKING PROFIT. SHARES ARE NOTHING
BUT A PAPER (LIKE A HOUSE DOCUMENT ) . IT IS ISSUED BY A COMPANY TO THE PUBLIC FOR RAISING
MONEY.

MONEY THAT THE COMPANY RAISES BY ISSUING THE SHARES WILL BE USED FOR THE DEVELOPMENT OF
THE COMPANY BY OPENING A NEW BRANCH OR BY DEVELOPING A NEW PRODUCT WHICH INCREASES
ITS PROFIT. AS PREVIOUSLY MENTIONED, A SHARE IS A DOCUMENT WHICH CONTAINS NAME OF THE
ISSUING COMPANY, THE KIND OF SHARE ITS ISSUING, VALUE OF THE SHARE etc. BUT NOWADAYS
THERE IS NO PHYSICAL FORMAT FOR A SHARE. SHARES ARE BEING HELD, TRADED AND DEALT
VIRTUALLY i.e DIGITALLY.

ONE WHO BUYS THE SHARE IS CALLED THE SHARE HOLDER OF THE COMPANY. NOW, LET ME POSE
A QUESTION: WHAT ARE THE BENEFITS FOR THE SHARE HOLDERS? LET’S SEE AN EXAMPLE

WE ALL KNOW ABOUT THE TATA MOTORS COMPANY WHICH IS INVOLVED IN THE MAKING AND
SELLING OF AUTOMOBILES. IN THE YEAR 2000 THE PRICE OF ITS SHARE WAS RS 41 PER SHARE ,BUT, AS
OF AUGUST 2023 THE SHARE PRICE OF TATA MOTORS COMPANY IS RS 618 . LET’S ASSUME IF YOU HAD
BOUGHT 1000 SHARES OF TATA MOTORS IN THE YEAR 2000 FOR RS 41,000 (1000 SHARES * 41) , YOU
WILL NOW BE HAVING AN OVERALL REVENUE OF RS 6,18,000. AFTER REDUCING THE INVESTED
AMOUNT OF RS 41,000 (6,18,000- 41,000) YOU WILL HAVE A PROFIT OF RS 5,77,000. THIS IS JUST ONE
EXAMPLE. THRE ARE MANY COMPANIES LIKE THESE WHICH SELL SHARES TO THE PUBLIC. IF YOU HAD
BEEN AN ACTIVE PERSON IN THE STOCK MARKET AND HAD BOUGHT SHARES OF COMPANIES LIKE TATA
MOTORS ; RIGHT NOW YOU WOULD HAVE BEEN RICH AND A FINACIALLY INDEPENDENT PERSON.

THE ABOVE MENTIONED PROCESS IS CALLED INVESTING. IN SHORT- INVESTING IN SHARE MARKET
REFERS TO THE BUYING OF A SHARE BY ANALYSING A COMPANY’S FUNDAMENTALS WITH AN AIM OF
EARNING DIVIDENDS OR TO GAIN A GOOD INCOME UPON SELLING IT AT THE RIGHT TIME WHEN ITS
SHARE PRICES HAVE GONE UP IN THE SHARE MARKET.

HOW TO ANALYSE A SHARE & WHAT IS TRADING.....................

- BY Mukesh Kumar.s
 3rd YEAR B.COM A&F