Definition of stocks?
Stocks also known as shares in India, means ownership of a company. Even if you own a single share or stock you are called a shareholder and can claim certain benefits of shareholder. In India once the IPO or Initial Public Offering is complete the shares are than listed on the stock exchanges and you have trading that takes place. These stocks or shares are than listed on the NSE and the BSE. Different types of stocks or shares In India In India, there are different types of shares that are traded.
Types of Stocks or Shares
There are preference shares for an example and than there are equity shares. Equity shares are the ones that are traded in the stock markets. There is also a new types of shares or stocks that are called shares with Differential Voting Rights. These are popularly called DVRs. In India, you have companies like Tata Motors, that have issued shares with differential voting rights.
Trading of Shares or stocks in the Indian markets?
Once you come-up with an IPO, your stocks are traded on the Bombay Stock Exchange or the National Stock Exchange. There is also the MCX where stocks and shares are traded, though MCX is known for trading in commodities.
When and where to buy shares and stocks in India?
Trading in shares and stocks is a complicated process in itself You need to be alert and aware about various aspects before trading stocks, or else you could end-up with huge losses on the exchanges. We suggest you one thing, if you are a beginner, spend sometime in understanding how the markets work and how the whole sytem gives you opportunities. You can also take help of various professionals who are expert in this field to understand markets well.
Why to invest in shares and stocks?
You have many options of investing, including real estate and fixed interest yielding instruments. You can make a choice. But, the reason to invest in shares and stocks is that you can beat inflation as it gives you handsome returns as compared to FDs and Real Estates investments. For example. Let us say that fixed instruments give you a return of 7 per cent, whereas inflation is running at 6 per cent. What you gain is a real rate of return of only 1 per cent. By investing in shares and stocks you can make much more money, thus boosting your rate of returns. But you should also be prepared for losses as Equity Markets are unpredictable and you can lose money also in Equity Trading.