STOCK MARKET

The Stock market, isn’t it a very familiar word? We hear this word almost every now and then. But what is a stock market? What is trading? Who are traders? How can a person be a successful trader? Who is the Big bull of the stock market? Even I had all these questions which made me more curious to know all about this vast and deep field of stock marketing and trading. So I did a bit of research about it and came up with this blog in which I have tried to summarize a lot about the stock market and trading.

The stock market is a component of a free-market economy that allows various companies to raise money by offering stock shares and corporate bonds and allows investors to participate in the financial achievements of the companies to make profits through capital gains as well as earn income through dividends. The stocks, also known as equities, represent ownership in the company. In simple words, A stock market is a public market where people can buy and sell shares on the stock exchange. Trading is the act or process of buying and selling or exchanging commodities at either wholesale or retail, within a country or between countries. A person involved in this business of trading is called a trader.

The Stock market is a complex system because here a large number of interacting agents lead to joint evolution and development of stock returns and the collective market behavior exhibits great emergent properties.

The Stock market is affected by several factors. For example:

Government policies:

New government policies implemented by considering the economic condition of the country, affect the stock market to a certain extent.

Interest Rate and Inflation:

Whenever the interest rates rise, banks raise the lending rates which in turn increases the cost for corporates and individuals alike. The rising cost tends to create an impact on the profit levels of the business affecting the stock prices of the company.

Exchange Rates:

The exchange rates of the Indian Rupee fluctuate with respect to other currencies. When the rupee hardens relative to other currencies, it makes Indian goods expensive in foreign markets. Especially companies engaged in overseas operations are heavily affected due to this.

There are other such factors that affect the stock market such as the Monetary Policy of RBI and Regulatory Policies of SEBI, economic numbers, etc.

For an investor, it is important to have a solid allocation strategy after a thorough understanding of the above factors. This ensures that the investor makes the right investment decisions and generates great return incomes in the long run.

Now let’s ponder upon how can a person be a successful trader.

· First things first, before investing the person should study the market thoroughly.

· An investor should always use a trading plan which includes entry, exit, and money management criteria for every purchase.

· In today’s time technology has developed to great extent. One can take its advantage and use it in being updated with new products. This is a lot of fun and rewarding at the same time.

· Now the most important point is that one should always protect their trading capital.

· The Stock market is all about taking a risk. So one should only risk what they can afford to lose. If the trader is not financially stable to Invest then he/she should save until they get completely stable. A trader should always know their limits and know when to stop trading or take a pause.

Stock market investments have proven to be one of the best ways to grow long-term wealth. Over several decades, the average stock market return has been around 10% per year. But remember this is just an average across the complete market. This return percentage keeps fluctuating up and down.

Now finally let’s know who is the big bull of the stock market. He is none other than the late Mr. Rakesh Jhunjhunwala aka Indian Warren Buffett who was born in an Indian middle-class family with his dad working as an income tax officer. In 1985 Mr. Rakesh Jhunjhunwala entered the stock market with only 5000 rupees with him. And the next year in 1986 he got his first big profit of 0.5 million rupees. Then his profit just increased gradually giving him a net worth of 46,000 crore rupees by 2022. Interesting, right?

YOU DO NOT SUCCEED WITHOUT OBSESSION.

Trading is a lot of hard work and risk as the stock market is a very competitive arena. A trader should have well discipline and a lot of patience to get success in this field of the stock market and trading.

The Stock market is a marathon and not a sprint race. You will always be able to get the best returns in long-term investment as compared to short-term investment.