Investing In Share Market
You may be in middle school , high school or perhaps even in college . At one point or another it may have occurred to have a part time job to meet your necessary requirements or just as a source of an extra income. But finding a high paying part time job was never a cake walk either, especially when our parents were pessimistic towards the idea of having a part time job. Therefore this series brings you the best high paying part time jobs for students out there. These part time jobs may or may not require investments depending upon their nature. For this part , I will discuss Investing In Share Market ( Investment Required ).
What Is Share Market ?
A share market ( not to be confused with stock market ) is where shares are issued or traded in ( stock trading involves trading equities). There are two types of share markets : Primary And Secondary markets. A Primary market is where a company gets registered to issue a certain amount of shares and raise money. Secondary market is used for selling of shares at market price or a price agreed upon by the two dealers for those particular shares.
Types Of Shares You Can Purchase
There are basically three types of shares in India.
1. Equity : Also known as ordinary shares, these shares represent fractional ownership of the company i.e. the holder of such shares are members of the company and have voting rights.
2. DVR : Differential Voting Rights shares do not carry the same voting strength as an equity share, but are generally compensated by getting a higher dividend than an equity share.
3. Preference : Preference shareholders get a priority when it comes to dividends and when a company is being wound up.
Risk Factor In Share Market
Equity shareholders undertake the maximum risk, followed by DVR shareholders, followed by Preference shareholders. Only buy the DVR when you feel there is a growth potential for the company.
How To Buy Shares ?
First, you need to open a trading account and a demat account. This trading and demat account will be linked to your savings account to from where transfer of money and shares will take place.
Things To Keep In Mind Before Buying Shares
1. Do not go too high during your initial investment stages.
2. Investing profitably in share markets requires skill & experience.
3. Perform a Google search for the company you wish to invest in.
4. Do check if the company’s balance sheet is clean.
5. Do check the company’s earning history and outlook.
6. Most importantly be thoroughly sure if the company is profitable.