Basic Questions Pertaining to Stock Market

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Basic Questions Pertaining to Stock Market

Stock marketing is similar to gambling. In this field, losing money is equally easy as to earn. Stock marketing can be a curse to those who have less / incomplete knowledge. Hence before indulging into such activities gather more and more information about it. But it does not conclude that you should be certified or should have eligibility or talent. With right information you can rule the field.

Why do companies list on the stock market?

Answer is as simple, companies generally list on the stock market in order to raise capital for their company and create a market in the company’s shares. The owners give up a share in the company in return for money to help expand the company.

What are the advantages of holding share?

By holding shares you have the capability to share in the success of the company through capital growth, the better a company does the higher the investment returns.

There are different types of shares:

1) Ordinary Shares

2) Preference Shares

3) Deferred Shares

Ordinary Shares: This is one of the most commonly bought shares. Ordinary share give the owner right to vote, attend the annual general meeting and to receive copies of the accounts. The holder may also benefit from company specific perks such as discounts on products.

Preference Shares: It may be cumulative in which case any arrear dividend has to be made up in future years before dividends on ordinary shares can be resumed.

Deferred Shares: these shares only receive a dividend once preference shares have received their fixed rate of dividend and ordinary shares have received a specified dividend

The new traders before trading can take the help of advisory firms which provide accurate Stock Market tips in the form of Intraday trading tips and equity tips. The buy and sell trades should always be placed with proper Stop Loss.

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