What is Stock Market

The stock market is one of the most versatile sectors in the financial system, and the stock market plays an important role in economic development.

The stock market is a hub where facilities are provided to investors to purchase and sell their share, bonds, and debentures, etc.

In other words, the stock market is a platform for trading various securities and derivatives without any barriers. The stock market acts as a barometer which is used to measure the performance of the economy with its development.

Indian Stock Market Indices

A stock market index shows the static analysis of the ups and downs occurring in the stock market.

To create an index, a few similar kinds of stocks are chosen from amongst the securities already listed and grouped together.

The criteria of stock selection could be the size of the industry, market capitalization or the size of the company. The stock indices reflect overall market sentiment and direction of the price movement of product in financial, commodities or money market.

The biggest stock exchange in India are:

  1. NSE – national stock exchange
  2. BSE – Bombay stock exchange
  3. CSE – Calcutta stock exchange

Notable Indices In India:

  1. Benchmark indices like NSE NIFTY and BSE SENSEX.
  2. Broad-based indices like NIFTY 50 and BSE 100
  3. Indices based on market SMALLCAP and BSE MIDCAP
  4. Sectoral indices like NIFTY FMCG INDEX and CNX IT.

What is Sensex And Nifty?

The Sensex is primarily an index that reflects the Bombay Stock Exchange (BSE) which got established in 1875.

The Sensex consists of 30 distinguished stocks owned by sectors that are traded actively in the exchange market. Sensex truly reflects the Indian stock market movement.

An increase in the Sensex value indicates an increase in the price of shares; a decrease in the Sensex value indicates a decrease in the price of shares.

If the Sensex value increases it means that there is a general increase in the prices of shares whereas if the Sensex decreases it means there is a general decrease in the price of shares.

The word Nifty can be termed as a derivative of National and Fifty. It contains 50 actively traded stocks. National Stock Exchange Fifty (Nifty) is a wide record of the National Stock Exchange (NSE).

How is Nifty Different From Sensex?

As such, there is no main difference between Sensex and Nifty as both targets towards large capital stocks.

Both Nifty and Sensex are indices of the stock market that indicate the strength and volatility of the market.

The Nifty reflects the value of the National Stock Exchange (NSE) whereas Sensex is the stock market index for the Bombay Stock Exchange (BSE).

Also, Nifty is considered to have a more diversified portfolio when compared to Sensex. More trading is noticed to happen in NSE when compared to BSE.

Why should We Invest?

Investment is important to accomplish one’s financial goals and protect from unforeseen expenses that may arise. It is the process wherein the saved income of an individual or group of individuals is put into use in a manner ensuring the generation of further returns.

How To Invest in Share Market?

There are very few angel investors who see the stock market and stocks in the right perspective. To many of them, they can just be arrows which indicate the prices of shares that increase and decrease with time. If the arrow increases, you make money. If the arrow goes down, you lose your investment. That’s both the start and the end of the story.

But, a keen investor has a wider perspective of the share market than that. To him, the share prices don’t just increase and decrease, but in reality, live businesses in action.

By taking a few steps more to this, one can realize the profit stocks can bring and at the same time become one of the most fabulous asset classes to invest in. The advantages that come with it are unparalleled by any other asset class.

Share Market Tips For Beginners:

  1. Identifying your investment requirement will help you understand your necessities and limitations. Being an investor, you need to consider your present as well as future needs at the same time.
  1. It would be a smart move to list the debts and expenses and clear them out first before investing in a risky place.
  1. If you’re an investor who doesn’t opt for risky investments; fixed deposits and bonds will be the best option to keep losses at bay.
  1. Determine a smart investment strategy: After understanding the personal investment capacity, risk tolerance investors must analyze the stock market scenario to frame an appropriate investment strategy. Individuals must identify stocks that suit their needs.
  1. Diversifying your investment is a very good way wherein you can manage your investment risks and also seek exposure. Wise investors mostly invest in different companies under diverse sectors, some of them also invest in different countries as well. This lowers the risk and can be called as smart investing because one bad investment will not affect the other ones.
  1. Monitoring your shares or portfolio will reduce the risk of losses as it will help you keep a check on your previous investments. By doing this, one can understand from his past investments where should he invest and where he shouldn’t.

The stock exchange is dynamic and conditions are constantly changing. Tracking your investments regularly is important to exit and enter at the right time.

  1. Avoiding leverage to cut down your debts might work under some events, but not all. It may help you to recover from your past debts but you could fall in a debt pit for sure if the market turns and you fail to repay.

This can lead to financial as well as mental stress and can lead to the destruction of family lives as well as suicides in certain instances.

  1. Avoid greed: Receiving quick and handsome returns from your investments will certainly encourage you to invest more.

You might be in a hurry to whip up some quick money for a down payment for your home loan or the down-payment for a new car. You need to understand that the favored returns could happen due to market manipulation and not because of the company’s growth.

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