WHY STOCK MARKET EXIST ?

STOCK MARKET EXIST BECAUSE THE COMPANY WANTS MORE MONEY TO RUN OR GROW THERE BUSINESS.
BY BRINGING IPO ( INITIAL PUBLIC OFFERING ) A COMPANY GIVES SOME PORTION TO THE SHAREHOLDERS AND THE SHAREHOLDERS BECOME THE PARTNER IN THERE BUSINESS.

There are two type of market.

1. Primary market.
2. Secondary market.

PRIMARY MARKET:-In primary market the public apply for the IPO.
SECONDARY MARKET:-In secondary market company registered in stock market and ready to trade.

Assuming That an individual apply in IPO and he got the offer’s In IPO then he can either sell or keep purchasing in the auxiliary it relies upon the individual what he need to do.

In secondary market there are two exchange.

NSE (NATIONAL STOCK EXCHANGE) (NEW)

Investment

BSE (BOMBAY STOCK EXCHANGE) (OLD)

SECONDARY MARKET STARTS FROM 9:15 TO 3:30.

CONCLUSION:-

Stock market exist because business need money and they are rising through i.P.O.

How does someone make money in stock market.

By investing in a business for a longer period of time, and if the business will grow the people who had invested in that particular  company will get handsome profit in return.

it’s all about business and it has to be very successful.

”we don’t have to be smarter tghen rest”

we have to be more discipline than the rest”

—                                        Warren buffett.

WHY DO PEOPLE LOSE MONEY IN THE STOCK MARKET?

People lose money because of there quick decission they can’t keep paticent so they lose money they actually don’t know teh value .

If someone think that he/she will buy a particular stocks,
suppose example , 
wipro stock price is 432 and he/she want to buy that stock for 422 in big quantity for a longer period of time the he/she might wait for the price to come down at 422, and in selling purpose also if a person want to sell his stock at 452 then he/she have to wait for a perion of time.

Investment

WHAT ARE THE RISK INVESTING IN THE STOCK MARKET?

TYPES OF RISK

  • COMMODITY PRICE RISK
  • HEADLINE RISK 
  • OBSOLESCENCE RISK
  • DETECTION RISK 
  • LEGISLATIVE RISK 
  • INFLATIONARY RISK 
  • INTEREST RATE RISK
  • MODEL RISK
  • RATING RISK
  • COMMODITY PRICE RISK

Commodity price risk is the possibility that commodity price will cause financial losses for either commodity buyers or producers …. many furniture manufactures must buy wood, for example, so higher wood prices increase the cost of making furniture and negative impact furniture maker’s profit margins.

  • headline risk

Headline risk is THE POSSIBILITY THAT A NEWS STORY WILL ADVERSELY AFFECT THE PRICE OF AN INVESTMENT, such as a stock commodity. Headline risk can also impact the performance of the specific sector or the entire stock market. It depends upon news of any kind like economy level other country market specially U.S MARKET company headline etc. which spread quickly.

(WITHOUT DOING ANYTHING WRONG A COMPANY GET INTO A MESS FOR A SHORTER PERION OF TIME)

  • Rating risk
  1. CREDIT RATING : If the credit rating is good of the company then the company will get loan at cheaper interest rate.
  2. RATING OF SHARE PRICE, COMPANY: There are many big investors, mutual fund company which also give rating to a company.
  • OBSOLESCENCE RISK

One or other day business will change and the company will loss its name.
Eg. (NOKIA)
(Nothing is going to survive for longer period of time)
So, we have to keep an eye on business performance.

  • DETECTION RISK

It means to find the bogus in the organisation during the hour of inspecting and it didn’t come in the time and when the identification got it will be to late for the investors to deal there stock in light of the fact that around then there will be no purchaser on the ground that nobody will need to purchase the load of the organisation where there is extortion.

  • LEGISLATIVE RISK

It means the government changes the rule which affect to the companies.

  • INFLATION RISK

Inflation risk commonly refers to how the prices of goods and services increase more than expected or inversely, such situation results in the same amount of money resulting in less purchasing power. Inflation risk is also known as purchasing power risk. An example of inflation risk is BOND MARKET.

  • MODEL RISK

Model risk is a type of risk that occurs when a Financial Model is used to measure Quantitative Information such as a firm’s market risk or value transaction, and the model fails or performs inadequately and leads to adverse outcomes for the firm.
Business model can fail 
Eg:- KODAK (CAMERA COMPANY)