Stock Market For Beginners

Everyone’s dream is to have a life full of riches and what better way to have those riches by using the stock market. Stock market can get you rich faster than anything else.

Yes, in theory the above can be true but there are two ways to do that , the first one to start a company, make it profitable, sell a a majority share to somebody else then reap the fruits of your labor through that minority holding in that company. The other way is less labor and you can get started with as little as $1000.

No risk and no gain is the mantra. Stock market is not for the faint hearted. You should strive to make good money out of the stock markets by investing in a particular stock. Your shareholding will be less but then you do not worry about the stock holding but about when you will make good money by selling your stake.

Stock markets are an easy thing to learn and master if you have the will and the patience. You do not require huge amounts of money to start making money in the markets. It will be your risk bearing attitude that will make the difference.

Let us get the initial understanding of what is a stock? I will take an example of a company called XYZ, newly formed and into the business of selling shirts. This company XYZ will need money to buy machinery, raw material, pay for employees salary etc and the money will come in the form of loans, money from friends and family and also you sell some part of the company to other persons or companies. How do you part with ownership of the company is that you create shares or parts of the company for say $10 each .

Theoretically each share is a fraction of the company that you own. Now if that company is profitable then you each share that you won will have more value. So a share which has $1 value can be sold for $100 if the stock market perceives that the share has that much value.

Selling the shares is equivalent to selling your part of the company to the other. The reason that the other person buys those shares for more value from you is that for that money he thinks he will be able to again sell it for a better profit.

Hope this will you understand the stock marekt better.

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