Stock Market

Stock Market Investment is a very interesting and easy business for anybody. It can be controlled online from any part of the world. On one hand it gives you the opportunity to make money at high speed but on the other hand it is the most risky business for money if you start this business unprepared. This business is controlled by several factors such as Country's economy, Govt.'s policies, Global Market Trends, Company's performance and Technology limits. Making money from stock market investment business depends on an Investor's regularly updated knowledge, self assessment of timely collected information, risk taking capacity and loss bearing limits. Each Reader of this blog must agree that he/she will verify each information provided or linked at this blog with his/her own reliable sources and take decision of buy, hold or sell of any stock at purely on his/her own risk.

Basics of Stock Market Investment
 

Stock Market Investment is an interesting and easy business which can be started by anyone above the age of 18 and controlled from anywhere in the world. Stock Market plays an important role to develop a nation. It gives stage to Entrepreneurs, Industrialists, Banks, Financial Institutions and investors to develop a network, contribute their money, knowledge and experience together and bring out products and services required by individuals, groups and even support other industries.

A small businessman can start a small business from his own pocket or loan from banks but to establish a large scale of business huge amount is required which can be provided by public through their small savings. To establish a company which wants to market its product or services on national or international level, public provides money through investment in its shares also called stocks. In return, profit making companies distribute their profit among their shareholders once or more times every year. Based on the profit making capacity of a company, its shares are traded among large number of investors daily on the stock exchanges like NIFTY or BSE. The Regular trading session time is Normal Market Open: 09:15 hrs and Normal Market Close: 15:30 hrs. Trading takes place on all days of the week except Saturdays, Sundays and Govt. holidays.

To buy and sell stocks, a person needs few things:

1) PAN Card: This is required as your identify for all financial transactions.

2) Demat Account: It is an account to keep record of buying and selling of stocks. It is opened by Demat Service Provider. There are many banks and firms providing this service.

3) Trading Account: It is an account to buy and sell stocks online. Few banks opens Demat and Trading Account together and you can trade stocks on their website or their software installed on your computer.

4) Bank Account: Normal saving account to allocate money to demat account to buy stocks and receive money from demat account after selling stocks.

Initial and regular expenses:

1) Demat and Trading Account Opening Charges are paid once when you open these accounts and maintenance charges are paid every year.

2) There are transaction charges on Buying and Selling of Stocks.

3) There can be other charges too.

So, when you plan to open a demat and trading account, it would be better to clear all your queries from demat and trading service provider in advance.

SBI Securities Demat and Trading Account Charges

1) Rs. 500 = Account Opening Charges (one time)
2) Rs. 390 = Annual Maintenance Charges
3) Intraday charges = 0.075% buy, 0.075% sell
4) Delivery charges = 0.5% buy, 0.5% sell
5) Cash Margin offered = 5 times
6) Trade Square time = 3:00 pm
7) Cash from sale of stocks is received in bank account = after 2 working days.
8) If no buyer is available to square off the deal (shares bought under margin), then stocks are bought back by Exchange under auction price which can be at profit or loss.

Investment Lesson 1

At eleven years old, Mr. Warren Buffett - The topmost successful investor in the world, purchased three shares of Cities Service Preferred at $38 per share for both himself and his elder sister, Doris. Shortly after buying the stock, it fell to just over $27 per share. A frightened but resilient Warren held his shares until they rebounded to $40. He promptly sold them - a mistake he would soon come to regret. Cities Service shot up to $200. The experience taught him one of the basic lessons of investing: "Patience is a virtue."