India is well known as a democratic country. In India, every person has the right to do anything freely without any restrictions. Not only India but also in every economy there is a big business called Share market. In the share market every day, more and more people participate and invest their income to earn more profits through the share of stocks, etc.
There is also a risk in the share market. Sometimes after investing their money in the share market, you may earn a profit, and sometimes you will have suffered from loss. But it’s not compulsory that every time you have to suffers from failure, you may also earn a profit after investing your money. As we know, everyone is not ready to take some risks in investing money. Only because of trouble in India, only 4% of peoples invest their money in the share market.
Role of share market in a foreign economy
If we talk about a foreign country, the USA is a prosperous and more investing country in the whole world. The USA has its money power which makes it a more powerful country than any other country. In the USA, many people compare to our country India, who invest their own money in share market to make it double or ready to take and suffered from loss also.
In the USA there are 50% of peoples who use their money for investment in share market. They also carry some benefits like making their money double and making their name and have a unique type of competition in foreign countries for investment. As we can explain this with the help of an example from India, the standard is of Chacha Chaudhary, who is famous for our comics in the past time.
He has invested their money in the share market, and one day he had more money to invest in the share market. Again and again, they invested in the share market. After investing more money, he made his famous name and became a successful editor.
Types of investment in the Share market
The types of investment are based on the number of shares received from the trading companies. The amount of share refund may be high or less based on the amount of investment and the types of investment you select. Here you came to know about different types of investment:-
(1) Fixed Deposit
fixed deposit, Debit Fund, Gold, Saving Account in fixed deposit. These investments are taking placed in a single box only because in these investments, you get a minimum of 4% of the share and a maximum of 7% based on the types of different types of terms and conditions.
(2) A mutual fund or Share market
If you invest your money in these investment fields, you will undoubtedly become rich. Still, it is suitable only when you have significant capital because these investments provide between 15 to 18 percentage of return, but it requires at least five years.
Qualifications required for share market
Only some peoples are investing their money in the share market only because of a lack of knowledge. They don’t have enough ability to participate in the share market. They don’t have enough patience to bearer risk. Share market works like a vegetable market, just like demand, deal, middle man, and supply.
Suppose the direction is more of a product than in this case, then the rate of the product will be high and more because there is no supply coming of product. But in this case, if the demand for a product is less, but the collection is more, then the rate of the product is low.
Origins of share market
Share markets are only run because of NSE (NATIONAL STOCK EXCHANGE) and BSE (BOMBAY STOCK EXCHANGE). These are the trading platform which helps us to make the internal and external trade. With the help of the term NINETY50, you can compare companies how the companies are performing in gaining loss or profit.
Nifty has a PG (PRICE EARNING RATIO), 30 is the highest, and ten is the lowest. If nifty is down, we can invest money because we will have more chance to earn a profit, and if excellent is high, we will divest because we will get more loss if we invest at high nifty. Like if we talk about ACC, they don’t have a strong company's fundamental profitability.
Their top line is not growing and bottom. The line is growling and also. They don’t have a compound annual growth rate, because of this one day, ACC has nothing and come on low and has suffered from significant loss of money.
Value of PE (Price-earnings ratio)
If PE is ten, then for earning 1 rupee we have to pay 10 rupees as investment and if the PE is 30 they for making 1 rupee we will have to invest 30 rupees, then we can earn 1 rupee easily. As we talk about earning and return per year so in 1999 at that time, the PE was 12 and the return per year came 105%, and in 2003 the PE is 11 and the return per year was 116% more than the year 1999.
It’s a profit in the investment of money in share market, and before the market crash in February 200 the PE was 28 and the return per year was came -53% in the year 2008 January PE was 28 in a year return per year came is -64 % in a year.
The loss more in a year means that when the PE is low, we can get more profit and when PE is high so we don’t invest our money in the share market because in that case, if we will support our money, so we have to ready for suffered from loss of funds.