STOCK EXCHANGE ‘A stock exchange is an important factor in the capital market. itis a secure place where trading is done in a systematic way. Here, the securities are bought and sold as per well-structured rules and regulations. Securities mentioned here includes debenture and share issued by a public company that is correctly listed at the stock exchange, debenture and bonds issued by the government bodies, municipal and public bodies. The purpose of a stock exchange is to help in capital formation and act as intermediary between companies and investors by providing a common platform for exchange, Typically bonds are traded Over-the-Counter (OTC), but a few corporate bonds are sold in a stock exchange. It can enforce rules and regulation on the brokers and firms that are enrolled with them, In other words, a stock exchange is a forum where securities like bonds and stocks are purchased and traded. This can be both an online trading platform and offline (physical location), ‘Some examples of stock exchanges across the globe are: BSE NASDAQ, LSE NYSE Features of Stock Exchange: + A market for securities: It is a wholesome market where securities of government, corporate companies, semi-government companies are bought and sold. + Second-hand securities-It associates with bonds, shares that have already been announced by the company once previously. + Regulate trade in securities- The exchange does not sell and buy bonds and shares on its own account. The broker or exchange members do the trade on the company’s behalf. + Dealings only in registered securities- Only listed securities recorded in the exchange office can be traded. + Transaction- Only through authorised brokers and members the transaction for securities can be made. + Recognition- It requires to be recognised by the central government. © seamed vith one Seamer‘Measuring device- it develops an index of a stock exchange. icates the growth and security of a business in the Operates as per rules- All the security dealings at the stock exchange are controlled by exchange rules and regulations and SEB! guidelines. Functions of Stock Exchange Following are some of the most important functions that are performed by stock exchange: 1 Role of an Economic Barometer: Stock exchange serves as an economic barometer that is indicative of the state of the economy. It records all the major and minor changes in the share prices. It is rightly said to be the pulse of the economy, which reflects the state of the economy. Valuation of Securities: Stock market helps in the valuation of securities based on the factors of supply and demand. The securities offered by companies that are profitable and growth-oriented tend to be valued higher. Valuation of securities helps creditors, investors and government in performing their respective functions. Transactional Safety: Transactional safety is ensured as the securities that are traded in the stock exchange are listed, and the listing of securities is done after verifying the company’s position. All companies listed have to adhere to the rules and regulations as laid out by the governing body. Contributor to Economic Growth: Stock exchange offers a platform for trading of securities of the various companies. This process of trading involves continuous disinvestment and reinvestment, which offers opportunities for capital formation and subsequently, growth of the economy. Making the public aware of equity investment: Stock exchange helps in providing information about investing in equity markets and by rolling out new issues to encourage people to invest in securities. Offers scope for speculation: By permitting healthy speculation of the traded securities, the stock exchange ensures demand and supply of securities and liquidity. Facilitates liquidity: The most important role of the stock exchange is in ensuring a ready platform for the sale and purchase of securities. This gives investors the confidence that the existing investments can be converted into cash, or in other words, stock exchange offers liquidity in terms of investment. Better Capital Allocation: Profit-making companies will have their shares traded actively, and so such companies are able to raise fresh capital from the equity market © seamed vith one SeamerStock market helps in better allocation of capital for the investors so that maximum. profit can be eamed 9. Encourages investment and savings: Stock market serves as an important source of investment in various securities which offer greater returns. Investing in the stock market makes for a better investment option than gold and silver. Factors affecting stock market: . GovernmentPolicies: Economy and business are largely affected by Government policies. The Government has to implement new policies in regard to the economic condition of the country. Any new change in policy can be profitable for the economy or tighten the grip around, This creates a possibility of the stock market being affected due to any change or introduction of the new policy by the Govemment. For instance, the increase in corporate taxes impacts the industry severely as their profits will take a hit and at the same time the stock price will fall. . Monetary Policy of ~—sRBI_—«s and ~—sRegulatory Policies. «oof SEBI: Reserve Bank of India (RBI) is the apex body which regulates the monetary policy in India. RBI keeps on reviewing its monitory policy. Any increase or decrease in Repo and Reverse Repo rates impacts the stock prices. If RBI raises the key rates it reduces the liquidity in the banks. This makes borrowing costlier for them and in turn, they increase the lending rates. Ultimately, this makes borrowing highly expensive for the business community and may find it difficult to service their debt obligations. Investors see it as a barrier in the expansion of business activities and start selling the shares of the company which reduces its stock price. A reverse of this happens when RBI follows a dovish monetary policy. Banks reduces the lending rates which leads to credit expansion. Investors, consider it as a positive step and stock price starts improving, Similarly, any changes in trading and investment policies done by the Securities Exchange Board of India (SEB!) who keeps an eye on the entire stock market activities impacts the performance of the shares of the listed companies on the stock exchanges (NSE, BSE). Nifty50 and Sensex are two major benchmark indices in India. . Exchange Rates: The exchange rates of Indian Rupee keep fluctuating vis-8-vis other currencies. When the rupee hardens in respect to other currencies it causes Indian goods to become expensive in foreign markets, Companies that are highly affected are the ones involved in overseas operations. © seamed vith one SeamerCompanies dependent on exports experience a drop indemand for their goods abroad. Thus, revenue from exports decline and stock prices of such companies in the home country fall. On the other hand, softening of rupee vis-a-vis other currencies results in opposite effect, in this, the stock price of exporters rises whereas, that of importer drops. Interest Rate and Inflation: ‘Whenever the interest rates go up, banks raise the lending rates which increases the cost for corporates and individuals alike. The rising cost will tend to create an impact on the profit levels of the business affecting the stock prices of the company. Inflation is a surge in the pricing of goods and services over a period of time. High inflation discourages investment and long-term economic growth. The listed companies in the stock market may postpone their investment and halt production, leading to negative economic growth. The fall in the value of money could also lead to a fall in the value of savings. The stocks of luxurious companies also tend to suffer as nobody will want to invest in them. This not only adversely affects one's purchasing power but also the investing power. Foreign Institutional Investors (Fils) and Domestic Institutional Investors (Dils): Fils and Dils activities highly impact the stock market. As they have a prominent role in the stocks of the company, their entry or exit will create a huge impact on the equity market and will influence the stock prices. Politics: Factors like election, budget, government intervention, stability, and other factors have a huge impact on the economy and the financial markets. The political events and budget announcements create tremendous levels of volatility in the market influencing the stock market deeply. Natural Disasters: Natural disasters hamper the lives and the market equally. It impacts the company’s performance and the capacity of people to spend the money. This will lead to lower levels of consumption, lower sales and revenues ultimately hitting the company’s stock performance. Economic Numbers: Various economic indicators affect the overall economy, ultimately creating animpact on the financial market. The movement of oil prices and GDP have a huge impact on the stock market. ‘A-country that is dependent on imported oil, any price change is likely to impact the economy. The movement of oil prices is one of the key determinants of the stock market. As and when © seamed vith one Seamerthe prices rise, the expenses will increase and will lower the buyers’ ability to invest in the market. Similarly, Gross Domestic Product (GDP) looks at the aspect of total economic production of the country and its overall economic health. It helps to showcase the economic developments and the future direction of the market. A healthy GDP status will create a positive impact on financial markets and investment. |. Gold Prices and Bonds: There is no established theory that expresses the relationship between stock price and gold & Bonds. Usually, stocks are considered a risky invest ment whereas gold & bonds are considered as a safe investment havens. So at the time of any major crisis in the economy, investor prefers to invest in safe instruments. As a result, gold and bond prices increase while the stock price tumbles. Conclusion: Stock prices of the company may rise or fall due to different factors. Ideally, the investor should have a solid allocation strategy in place after a thorough understanding of the above factors. It will ensure that the investor makes the right investment decision and generate magnificent retums in the long-run. DIFFERENCE BETWEEN NSE AND BSE India’s two main stock exchanges are the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), These two are among Asia’s largest stock exchange surpassed only by the stock exchanges of Japan and China The Bombay Stock Exchange is one of Asia’s oldest stock exchange, beginning operations on July 9, 1875, as “The Native Share & Stock Brokers Association”. The National Stock Exchange is India’s biggest stock exchange in terms of market capitalization. Its operation beginning in 1992, it was the first exchange to bring in fully automated trading to India. © seamed vith one SeamerDifferences between NSE and BSE NSE Its one ofthe biggest stock exchanges India along with being a harbinger of technological advances by the Introduction of fully automated trading systems {As electronic trading was incorporated from the beginning ofits establishment it always has been a fully electronic stock exchange promoting paperless trade Inthe global stock exchange rankings, NSE stands at the Tith Position The NSE has the lead in this segment as it has ‘monopolized it The NSE has more than 1600 companies listed under it INSE's Stock Index ~ NIFTY ~ gives top 50 stock index NSE was recognized as @ stock exchange in 1993 NSE promotes trading in equity, debts and currency derivatives ‘The BSE is one of Asia's oldest stock exchange markets which offers a legacy of high-speed trading Only in 1995 did BSE switch to electronic trading afte following @ paper trading pattem since 1875, ‘The BSE stands at 10th position in the global stock exchange rankings BSE enjoys far lower volumes among Investors and traders alike ‘The BSE has more than 5000 companies listed under it SE's Stock Index ~ SENSEX gives top 30 stock index BSE became a recognized stock exchange in 1957 BSE promotes trading in debt Instruments, mutual funds and NSE and BSE are the major stock exchanges in India, where various financial instruments like stocks, derivatives, ETFs, Mutual Funds, corporate bonds etc., are listed and traded over an electronic platform. NSE is India’s biggest stock exchange in terms of market capitalisation. Its benchmark index is NIFTY 50, which tracks the fifty largest and most liquid stocks out of the 1600 plus listed companies on NSE. Similarly, BSE’s benchmark index is SENSEX which tracks the largest thirty most established companies on the Bombay Stock Exchange. INDEX CONCEPT To determine the market trend, the market experts cannot calculate the performance of each listed stock. That would be time-consuming and impossible as thousands of stocks are listed, and by the end of the calculation, the market trends would have changed. © seamed ith ScannerSo, how can anyone make a spontaneous decision? With an Index value. ‘An index picks a sample of listed companies from their respective industries that act as a representative. It is similar to choosing a few apples from the basket and not the entire store, as they would be enough to know if the Apples are overall good. This sample of listed companies is called the Index, and the companies under the sample are called index constituents. In the Index, stocks are not picked only from a specific industry; instead, they are chosen from all the major sectors. This way, when the performance is evaluated and presented, we are looking at the overall picture and not a specific industry in the stock market In India, there are two stock exchanges; the Bombay Stock Exchange and National Stock Exchange. Each stock exchange needs to have an index to measure the performance of the market. Sensex is the Index for Bombay Stack Exchange (BSE), and Nifty is the Index for National Stock Exchange (NSE) Sensex Sensex, is the Index for the Bombay Stock Exchange. As discussed earlier, an index is a sample of listed companies that act as the representative. Over 6000 companies are listed under the Bombay Stock Exchange, and practically it would be impossible to analyze the performance individually. To solve this issue, BSE uses Sensex. Sensex picks up 30 companies that are luring, performing, and best for the market, If these companies are performing poorly, then the market trends are down. However, if only these 30 companies are outperforming, then the market trends are bullish, Now, the question is, how does a company qualify to fall under Sensex? There is a certain criterion that the Bombay Stock Exchange use to pick companies under Sensex. A few of these criteria are - + Market Capitalization. + Trading Frequency. + High Liquidity. + Industry Representation. + Average daily turnover. NIFTY Nifty is the Index used by the National Stock Exchange and is made by the combination of National and Fifty (Nifty). Unlike Sensex, Nifty collects the sample of 50 performing and luring stocks to determine the market trends. © seamed vith one SeamerSimilar to Sensex, Nifty picks stocks from different sectors. Some of these include the stocks from the sectors such as IT, Consumer Goods, financial services, automobiles, telecommunication, and more. Besides, stocks picked under Nifty are those that outperform others. Criteria to qualify for Nifty are - «+ Liquidity + Float Adjustment + Domicile SENSEX CALCULATION: Sensex or sensitive Index is calculated based on the free-float capitalization of all the 30 companies and the base value of Sensex. Here is a step-by-step process on how to calculate the Sensex - «The market capitalization of 30 companies is calculated. + The free Float capitalization of all the companies is estimated and added together to get the total free-float capitalization value. + Apply the Sensex formula, Sensex formula = (Free float market capitalization of 30 companies / Base market capitalization) * Base value of the Index. «The Sensex value is calculated. NIFTY CALCULATION Nifty or National Fifty is calculated based on the free float capitalization-weighted method of all the 50 companies. The price of the Index reflects the total market value of all the stocks in the Index relative tothe base period. = on November 3rd, 1995. Market Capitalization = Current market price * outstanding shares. The aggregate market capitalization of each scrip in the Index during the base period is the Index's base market capitalization. During the base period, the market capitalization is equated to an index value of 1000, which is known as the base index value. Free Float Market Capitalisation = Shares outstanding * Price * Investable Weight Factors (iweys Index Value = (Current Market Value / Base Market Capital) * Nifty Base Index Value (1000) The basic difference between Sensex and Nifty is the number of companies that are grouped together. Sensex considers 30 companies, and Nifty considers 50 companies for index purposes. © seamed vith one SeamerHowever, due to the high bullish nature of BSE, Nifty has been outperformed by Sensex when compared statistically. BULL AND BEAR MARKET Abull market is a market that is on the rise and where the conditions of the economy are generally favorable, A bear market exists in an economy that is receding and where most stocks are declining in value. Because the financial markets are greatly influenced by inves tors’ attitudes, these terms also denote how investors feel about the market and the ensuing economic trends. A bull market is typified by a sustained increase in prices. In the case of equity markets, a bull market denotes a rise in the prices of companies shares. In such times, investors often have faith that the uptrend will continue over the long term. In this scenario, the country's economy is typically strong and employment levels are high. By contrast, a bear market is one that is in decline. A market is usually not considered a true "bear" market unless it has fallen 20% or more from recent highs. In a bear market, share prices are continuously dropping. This results in a downward trend that investors believe will continue; this belief, in turn, perpetuates the downward spiral. During a bear market, the economy slows down and unemployment rises as companies begin laying off workers. © seamed vith one SeamerPs Economy prices Gross domestic production rar ‘Stocks can give higher retums forthe higher risk they entail. Equity investment returns are good during this time. High GDP growth is expected, economic demand increases, leading to higher Industrial output, higher sales, and tumover. ‘Dus to increased demand, the production ‘pace continues to grow and proves to be: eae Preserving capital and stable Income becomes important. So, less risky Investments ke bank fxed deposits, gold investments and government bonds are sought. Low GDP expectations, ap in demand leading to the deciine in the production of goods, low sales volumes, and turnover. Demand shrinks or remains steady ‘9s only essentials are required Inflation Food, clothing and FMCG prices ‘encouraging for wholesalers. Wages rise Increase and put pressure on the and suppliers demand higher prices. retail segment. ‘terest rate cycle le onan uptrend and RBI reduces the interest rates to {foreign investors get attracted tothe high _ stimulate liquidty and capex to Interest rate interest rate environment This helps to boost production; foreign investors. Control the excess liqulcty in the ‘avoid investing or pull out during economy. this time, all th we aspects ofthe economy are dong Well. von eauces ab spending ‘during this phase, even consumers spend consumer emt een nearest power reduces, An Indivisual ons beecieel hate Intends to eave more as the sentiment _inlvual rises with the expectation thet ‘objective is capital preservation, the economy wil continue to grow and do Lnti revival of economie growth, welt ‘The economy is sluggish, and ‘The economy is thriving. Industry Is segments of industrial and ‘booming, and production is flourishing. _preducton unts get affected. This Employment Growth is favourable, leading to greater employment leads to lay-ofs to curtall costs and leads to higher unemployment levels. © seamed ith ScannerInstruments traded in stock market: 1. Equities Equities are the share in the ownership of the company and are one of the most traded financial instruments on the exchange. But why do investors and traders swarm towards equity? This is because it has the ability to multiply your capital by generating higher returns as compared to other financial instruments. Other features that make it the most preferred avenue are: © Buying shares/stocks give you the part-ownership in the company ‘© Has better liquidity, which means you can easily sell your shares in the market © Its inherent volatility offers investors to book short term profits based on stock price fluctuations Derivatives Derivatives are instruments that derive their value from an underlying asset(s) such as currencies, stocks, interest rates, etc. Derivatives contracts are contracts in which a predefined quantity of stocks, commodities, indices, currencies, bonds, etc. are bought and sold on a specific date at a predetermined rate. The most popular derivatives contracts are futures and options contracts with the latter being a right and not an obligation 3. Debt Secu ies Securities issued by companies or the government with an objective to generate funds are known as Debt Instruments. Its features are: Interest on these instruments can be earned at specific intervals ‘© The principal amount invested will be repaid at the end of the contract period ‘© They can be both secured as well as unsecured © Issued to raise funds for day-to-day operations, business expansion, acquisitions, paying off debts, or more © Yields lower returns as compared to most other instruments like Equity, Gold, and Real Estate over the long run © seamed vith one SeamerDebt instruments traded on the exchange can be classified into bonds and debentures. Bonds These fixed-income debt instruments are issued by the central and state government, and large corporations to raise funds. They can either be secured by a physical asset or a guarantee, There are various types of bonds such as floating bonds, inflation-indexed bonds, sovereign gold bonds, and more. Debentures Debentures are issued by the corporates to accumulate funds by borrowing money from the public. Debentures are generally unsecured and are issued to raise capital for a specific purpose. 4, Mutual Funds ‘A fund created by contribution from a number of investors is known as a Mutual Fund. The money is then invested in securities like equities, bonds, money market instruments, and other securities available in the market. It offers investors an opportunity to invest in diversified and professionally managed securities at a relatively low cost. You can choose to get these funds managed by expert and professional portfolio managers who will do meticulous research before investing your money. 5. Exchange-Traded Funds (ETFs) ETFs are just like mutual funds, but the major point of difference is that ETFs are traded on the stock exchange. ETFs have a comparatively lower expense ratio. Investors prefer investing in ETFS as these are registered with the Securities and Exchange Board of India (SEBI). Wondering how ETFs differ from mutual funds? Conclusion Each of the above-mentioned instruments is unique and has features that make them a favorable trading option. Although, the way they are traded on the exchange differs. After knowing the ins and outs of the numerous investment options to trade, don't limit yourself to 1 option. Diversify your portfolio by investing in multiple instruments depending on your risk appetite to achieve your financial goals. © seamed vith one SeamerDematerialisation Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited into the 80's account with his DP. How can one convert physical holding into electronic holding i.e. how can one dematerialise securities? In order to dematerialise physical securities one has to fill in a DRF (Demat Request Form) which is available with the DP and submit the same along with physical certificates that are to be dematerialised. Separate ORF has to be filled for each ISIN. The complete process of dematerialisation is outlined below: + Surrender certificates for dematerialisation to your DP. DP intimates to the Depository regarding the request through the system. DP submits the certificates to the registrar of the Issuer Company. Registrar confirms the dematerialisation request from depository. After dematerialising the certificates, Registrar updates accounts and informs depository regarding completion of dematerialisation. Depository updates its accounts and informs the DP. DP updates the demat account of the investor. ISIN ISIN. (International Securities Identification Number) is a unique 12 digit alpha numeric identification number allotted for a security (E.g.- INE383C01018). Equity-fully paid Up, equity-partly paid up, equity with differential voting /dividend rights issued by the same issuer will have different ISINs. Can electronic holdings be converted back into physical certificates? Yes. The process is called rematerialisation. If one wishes to get back his securities in the physical form he has to fill in the RRF (Remat Request Form) and request his DP for © seaeed with OK Scannerrematerialisation of the balances in his securities account. The process of rematerialisation is outlined below: ‘+ Make a request for rematerialisation. * Depository participant intimates depository regarding the request through the system. * Depository confirms rematerialisation request to the registrar. ‘+ Registrar updates accounts and prints certificates. + Depository updates accounts and downloads details to depository participant. ‘+ Registrar dispatches certificates to investor. Concept of Margin Margin refers to the amount of equity an investor has in their brokerage account. "To margin" or "buying on margin’ means to use money borrowed from a broker to purchase securities. You must have a margin account to do so, rather than a standard brokerage account. A margin account is a brokerage account in which the broker lends the investor money to buy more securities than what they could otherwise buy with the balance in their account. Using margin to purchase securities is effectively like using the current cash or securities already in your account as collateral for a loan. The collateralized loan comes with a periodic interest rate that must be paid. The investor is using borrowed money, and therefore both the losses and gains will be magnified as a result. Margin investing can be advantageous in cases where the investor anticipates earning a higher rate of return on the investment than what they are paying in interest on the loan. For example, if you have an initial margin equirement of 60% for your margin account, and ‘you want to purchase $10,000 worth of securities, then your margin would be $6,000, and you could borrow the rest from the broker. Buying on Margin Buying on margin is borrowing money from a broker in order to purchase stock. You can think of it as a loan from your brokerage. Margin trading allows you to buy more stock than you'd be able to normally. To trade on margin, you need a margin account. This is different from a regular cash account, in which you trade using the money in the account. © seaeed with OK ScannerMinimum Margi By law, your broker is required to obtain your consent to open a margin account. The margin account may be part of your standard account opening agreement or may be a completely separate agreement. An initial invest ment of at least $2,000 is required for a margin account, though some brokerages require more. This deposit is known as the minimum margin. Initial Margin Once the account is opened and operational, you can borrow up to 50% of the purchase price of a stock. This portion of the purchase price that you deposit is known as the initial margin. It's essential to know that you don't have to margin all the way up to 50%. You can borrow less, say 10% or 25%. Be aware that some brokerages require you to deposit more than 50% of the purchase price.2 You can keep your loan as long as you want, provided you fulfill your obligations such as paying interest on time on the borrowed funds. When you sell the stock in a margin account, the proceeds go to your broker against the repayment of the loan until itis fully paid. Maintenance Margin and Margin Call There is also a restriction called the maintenance margin , which is the minimum account balance you must maintain before your broker will force you to deposit more funds or sell stock to pay down your loan. When this happens, it's known as a margin call. A margin call is effectively a demand from your brokerage for you to add money to your account or close out positions to bring your account back to the required level. If you do not meet the margin call, your brokerage firm can close out any open positions in order to bring the account back up to the minimum value. Your brokerage firm can do this without your approval and can choose which position(s) to liquidate. In addition, your brokerage firm can charge you a commission for the transaction(s). You are responsible for any losses sustained during this process, and your brokerage firm may liquidate enough shares or contracts to exceed the initial margin requirement. Myths attached to stock market investment. The Reality of Investment Risk Investing is risky, so is driving a car, swimming, riding a bike, walking on the pavement. We learn to do these things with the guidance and help of our parents and trainers pretty early in our lives. But often we ignore the importance to educate about handling, investing and saving money which is a very essential skill for life. © seamed vith one SeamerInvestment is indeed risky, only if you ignore to learn about investments and still try your luck. If you do not understand your risk appetite and risk involved in the process, investment can thoroughly be dangerous for you. Like you would arrange a coach to learn to swim, similarly ‘you must educate yourself to understand investment properly. Risk often comes form not being aware of what you're doing. Educating yourself will eliminate risk away from your investment decisions. So, investing in stock market isn’t risky if you know how to do it in the right way. Investing in stocks is gambling Stock market investing differs from speculating in the stock market. Gambling may imitate investing in stocks, but these two behaviors are fundamentally different. Benjamin Graham, the father of value investing, rightly said that a market is a voting machine (gambling) in the short term, but a weighing machine in the long run. And investing is an endeavor in the long run. Shares are seen by investors as merely a trading instrument, they certainly forget that the stock reflects the company's ownership. In a corporation, a share of common stock represents part ownership. It entitles the holder to an asset claim as well as a percentage of the company's produced profit. In addition, gambling is a zero-sum game. Gambling merely takes money and gives it to a winner from a loser. Investing and generating wealth should not be confused with the zero-sum game of gambling. Investment cannot be compared with gabling. Pm not rich, Stock market is not for me. To invest in the stock market, you do not have to be a millionaire. The stock market is basically the only place where you can start investing with a small initial capital. You need at least few lakhs of rupees to buy a piece of property, even in a low-priced area, if compared to real estate You don't have to be a millionaire to build wealth on the stock market, all you need is to start early and keep investing regularly and let your money accumulate over a prolonged period of time. The Younger you are, the more risk you can take ‘Young investors tend to think about taking high risk in order to make surplus and extraordinary profit. Although the youngsters have greater number of years than an aged investor to cover Up, one should not fall for highly risky investments to book high profits. © seamed vith one SeamerWarren Buffett's 2 Investment rules Rule No.1: Never lose money Rule No.2: Never forget about Rule No.1. High Risk = High Rewards High-risk investments are not going to promise high returns. On the contrary, you can only invest in a high risky stock if it ensures high return. Such stock is hard to find. You can earn high profits with moderate or low risk bearing stocks. Buy quality companies, run by quality management, at a favorable price with ample of safety margin. So, you are not taking a high risk by purchasing good companies at a cheap price. The Stock Market is Exclusively for Experts Investing in the share market is not reserved for a select group of people, anyone can participate in the stock market and make the most of its benefits for wealth creation. Investing in the share market requires an understanding of the market and identifying the right shares. But, this process of learning is continuous and develops over time. The share market favours preparation and is, therefore, open to anyone with a keen interest in the market. You Can Only Make Money By Investing A Lot of Money This myth stems from the belief that to make profits, one must have a lot of financing to survive the losses along the way which isn’t true. The share market offers opportunities for traders with a variety of risk appetites and capital. After opening a Trading account, you can invest in shares for as low as RS. 10-50, The key is to recognise the right company shares through research and to develop a strategy to minimise your losses fromthe beginning. © seamed vith one Seamer