THE ART OF TRADING

Stock market education in India is still at its nascent stage.

- David Carmel Alex

There are many who would wish to pursue a career or even just simply invest in stock market, but are unsure of how to go about and where to start. David Carmel Alex, the Chairman and CEO of Maverix Pro Limited explain in simple terms some of the queries that crop up in the minds of a beginner.

What is stock market? What are its advantages?

The stock market is a public platform where shares of companies are bought and sold at a live transaction price (LTP) which is determined by supply and demand. The stock market offers various advantages

• Companies that are publicly listed are easily able to raise funds from the public for further expansion of projects through an initial public offering (IPO)

• Investors in the stock market can earn a return from both capital appreciation and dividend income

• Liquidity. Typically, common shares can be bought and sold more quickly and easily than other investments, such as real estate, art or jewellery. This means investors can buy or sell their investment for cash with relative ease.

Do I need huge capital to enter into stock market?

No, it is not required to have large capital when investing. However, returns in the stock market are governed by something called “risk-to-return ratio”, which basically means the more risk taken, the more the rewards. Essentially when investing in the stock market your money is working for you, hence logically the more funds invested the more productive will be your returns.

How is stock market changing the life of people in India?