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Everything You Should Know Before Investing in Equity Markets

05 Jan 2023

Share equity investment is not new to Indians, and many investors choose this way to invest. Commonly, share equity represents you owning a fraction of a company (by investing in it, or buying a share of it). If you buy a share of the company, you have a right to vote in it too. However, as appealing as this seems to the majority of investors, several just jump on the equity bandwagon without any due diligence. This can prove detrimental to investors who think they are going to make big bucks as soon as they invest in equity markets. There are aspects of these investments you should have a grasp of before you choose to place your wealth in the hands of equity. 

A Place for Trading

Any market is a place where buyers and sellers meet to trade. What is traded in the equity markets? Equity markets are essentially places where stocks and shares of given companies/corporations are traded. These places are known as stock exchanges and the markets are known as share markets/stock markets. What equity markets allow you to do is sell or buy equity (stocks and shares) on particular platforms. If you hold stock of a company, that is, a number of shares, you have ‘shareholder’s equity’. You may invest in as many equities or stocks as you wish. Nevertheless, before you do, there are some things to know. 

Equity Markets in India

Equity shareholders are those individuals who trade in equities on stock exchanges in India. Regarding the stock markets in India, equities are offered at the NSE, or National Stock Exchange, the BSE, or the Bombay Stock Exchange, and the most recent, Metropolitan Stock Exchange (MSE). On these exchanges, shares of listed companies are purchased or sold. Most of these transactions are now done online, as this serves the purpose of speed and efficiency. Plus, you can trade from anywhere, taking advantage of purposeful time slots and opportunities they offer. Furthermore, you should know that equity brokers are simply brokers who facilitate the purchase and sale of shares. They have platforms that let you trade after you open a Demat account to store your equities. One such reputed and reliable broker in India is none other than Motilal Oswal, for instance. 

Types of Equity Markets

The trading of equity is done in one of two ways. The first way is via spot or cash markets. The other is through the futures market. The spot/cash markets are public markets where stocks, once traded, are delivered immediately. The futures market, as its name implies, is a market where shares are delivered at a later time. Therefore, an order/request of stocks may be placed currently, and with a fixed value condition, it may be bought at a later date, or sold at a later date if you already hold a stock. 

Growth in Equity Markets

It is a well-known fact that the stock market can either make you or break you. However, with a little planning and knowledge about the markets, the equity markets are a good place to invest a portion of your wealth. Common things to know before you invest are to pick stocks whose companies display potential growth value. Also, these companies may be small, but this only means they can grow large. Additionally, you should do your homework about a company and then invest. The simplest way to get going is to sign up with an efficient broker like Motilal Oswal. With help in the form of handy hints and blogs, you can only stay ahead of the game in share equity investment. 

Related Articles: Follow these 5 Expert Advices to Get Started with Investing | 5 Rules Every New Investor Must Know Before Investing | 6 Stock Market Investing Disasters To Stay Away From |  10 common mistakes made by SIP investors | 4 Smart Must-Follow Investment Tips for Beginners in India | Upcoming IPO | LIC IPO

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