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Sites objective Introduction How & where to invest Stock market Guidelines to invest
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Misunderstandings about stock market
Many people are averse to stock market because they thin it is like gambling are cheating. It is not so. In a private business when there is the profit the owner enjoys the profit. Similarly, in public limited company when company makes a profit it is distributed the share holder as dividend. (Or kept as cash reserve for future expenditure of the company) When the future prospects of the company is bright value of the stock increases. Then some of the share holders will sell their share and take profit. Due this, prices will decrease. This is the simple dynamics of stock market. The profit (increase in value + dividend + Bonus shares if any) in a year is the rate of return. Then what is wrong with the stock market? Why have many people lost their money in stock market?
Because, may be, they bought the wrong stock without any rationale or they bought at wrong time and wrong price, i.e. high price. (Go to Guidelines to invest) |