Hi there mates Come, allow us to discuss concerning the share market What’s the share market? Why is it in place? How does it work? What are its benefits and drawbacks? And how one can make investments cash in it That is my fourth or fifth video on monetary schooling I’ve made movies on mutual funds, bitcoins and tax saving which you’ll be able to see by clicking on the “i” button Allow us to discover out extra about share markets on this video Inventory market, share market or fairness market- all three imply the identical These are markets the place you should purchase or promote an organization’s shares Shopping for shares of an organization means shopping for some proportion of possession of that firm That’s, you turn into the holder of a proportion of that firm If that firm makes a revenue, some proportion of that revenue would even be given to you If that firm incurs a loss, a proportion of that loss would even be borne by you Telling you an instance of this on the smallest scale, presume you need to set up a begin up You could have 10,000 rupees, however that is not sufficient So, you go to your good friend and inform him to speculate one other 10,000 rupees and provide him a 50-50 partnership So, no matter your organization income sooner or later, 50% of it will be yours.50% of it will be your good friend’s On this case, you’ve got given 50% of the shares to your good friend on this firm The identical factor occurs on a bigger scale within the inventory market The one distinction being, as a substitute of going to your good friend, you go your entire world and invite them to purchase shares in your organization The origin of share markets dates to round 400 years in the past Across the 1600s, there was a Dutch East India firm, just like the British East India firm, There was an identical firm within the nation of Netherlands right now, generally known as Dutch East India firm In these occasions, individuals used to bask in lots of exploration utilizing ships Your entire world map had not but been found So the businesses used to ship their ships to find new lands and commerce with far-off locations The journey was once of over 1000’s of kilometers aboard a ship There was an enormous sum of money required for this Not one individual possessed such quantities of cash individually in these occasions So, they publicly invited individuals to speculate cash of their ships When these ships would journey lengthy distances to go to different lands and are available again with treasures from there They had been promised a share of those treasures/cash finally However this was a really dangerous affair As a result of throughout these occasions, greater than half of the ships failed to come back again They obtained misplaced, or broke down or obtained looted. Something may occur to them So traders realized the dangerous nature of this enterprise So, as a substitute of investing in a single ship, they most popular to put money into 5-6 of them In order that no less than one among them had probabilities of coming again One ship used to method a number of traders for cash So, this created considerably of a share market There have been open biddings of the ships on their docks Docks are the locations the place the ships come out from Steadily, this method grew to become profitable as a result of the cash crunch confronted by the businesses was supplemented by the widespread individuals.And the widespread individuals obtained an opportunity to earn more cash You should have learn within the historical past books about how wealthy the English East India firm and the Dutch East India firm grew to become throughout these occasions At present, every nation has its personal inventory trade and each nation has turn into enormously dependent upon the inventory market Inventory trade is that place, that constructing the place individuals purchase and promote shares of the businesses The market will be divided into two types- The first market and the secondary market Major markets is the place the businesses promote their shares The businesses resolve what precisely could be their share costs Though there are some rules on this too The businesses can not manoeuvre an excessive amount of as a result of lots of it relies upon upon the demand How a lot value are the individuals prepared to pay for the corporate’s shares If the worth of the corporate is 1 lakh rupees, it sells 1 lakh of its shares and presents shares at 1 re per share If its demand is excessive and lots of people need to purchase its shares, the corporate would clearly have the ability to promote its shares for the next value What the businesses do these days is resolve upon a variety.There is a minimal value and a most value They resolve to promote their shares inside that vary Some extent to be famous right here is that each share of the corporate has equal worth It’s upon the corporate to resolve what number of of its shares it needs to make If the entire worth of the corporate is 1 lakh, then it could make 1 lakh shares of 1 re every, Or it could make 2 lakh shares of 50 paise every When firms promote their shares within the share market, it by no means sells 100% of them The proprietor all the time retains majority of the shares to maintain possession of his resolution making energy In the event you promote all of the shares, then all of the patrons of the shares would turn into house owners of the corporate Since all of them turn into house owners, all of them can take choices relating to that firm The person who has greater than 50% of the shares would have the ability to make choices relating to the corporate Due to this fact the founders of the corporate favor to retain greater than 50% of the shares For instance, 60% of the shares of Fb are retained by Mark Zuckerberg The individuals who have purchased shares of the corporate can promote it to the opposite individuals That is referred to as the Secondary Market the place individuals purchase and promote shares amongst themselves and commerce in shares Within the Major Market, the businesses set the costs of their shares The businesses can not management the costs of their shares within the secondary market The share costs fluctuate relying upon the demand and provide of the shares So the costs of the shares fluctuate relying upon the demand and provide Nearly each huge nation has its personal inventory trade There are two common inventory exchanges in India One is the Bombay Inventory Alternate which has round 5400 registered firms The opposite is the Nationwide Inventory Alternate that has 1700 registered firms With so many international locations registered within the inventory trade, If we need to observe, general, whether or not the costs of the shares of the businesses are shifting up or down, How will we view this? To measure this, some measurements have been put in place- Sensex and Nifty Sensex reveals the common development of the highest thirty firms of the Bombay Inventory Alternate averaging out, whether or not the shares of the businesses are shifting up or down The total type of Sensex, the sensitivity index, shows the identical The variety of Sensex , that it has reached 40,000 marks The quantity itself means not so much The worth of this quantity will be understood solely upon comparability with the previous numbers As a result of this quantity has been randomly determined They determined, in the beginning that the values of the shares of the thirty firms could be this So we compile all of the numbers after which say that it’s 500 So, regularly, the sensex has been rising and it has reached the 40,000 mark previously 50 years So this reveals how far up have the share costs of those 30 firms gone in these previous 50 years There may be one other related index- NIFTY- Nationwide + Fifty Nifty reveals the worth fluctuations of the shares of high 50 firms listed on the Nationwide Inventory Alternate If an organization needs to promote its shares on the inventory trade, then that is termed as “public itemizing” If an organization is promoting its shares for the primary time, then it’s referred to as IPO- Preliminary Public Providing that’s, providing the shares to the general public for the primary time In the course of the days of the East India firm, it was very simpler to get this completed Anybody may promote the shares of their firm to the general public However right now, this process may be very lengthy and complex, and so it needs to be As a result of, give it some thought, how straightforward it’s to rip-off the individuals Anybody may get listed on the inventory trade with a pretend firm, and exaggerate the worth and achievements of its firm They might deceive the individuals and the individuals would foolishly put money into his firm He then may abscond with the cash So it has turn into extraordinarily straightforward to rip-off someone India in its historical past, has been a witness to lots of scams like these.Eg. Harshad Mehta rip-off Satyam rip-off, they had been all of the same- fooling the individuals and getting themselves listed on the inventory trade. gathering the cash after which absconding In order and when these scams occurred, the inventory exchanges realized that they should make their procedures stronger and rip-off proof For this the resolutions and guidelines had been made stronger because of which there are very sophisticated guidelines right now SEBI- Safety And Alternate Board of India is a regulatory physique that appears into points like which firms needs to be listed on the inventory trade and whether or not it’s being completed within the correct method or not If you wish to do that (i.e. get listed), then you would need to fulfill the norms of SEBI Their norms are very strict, for instance, There should be lots of checks and balances on the accounting of your organization Not less than two auditors should have had checked your organization’s accounting This whole course of possibly take round three years. Greater than 50 shareholders needs to be pre current within the firm if you’d like an organization to be publicly listed Whenever you go to promote their shares however there isn’t any demand for it amongst individuals then SEBI can take away your organization from the inventory market record Now, how will you make investments cash within the inventory markets? In the course of the occasions of the East India Firm, one may go to the docks the place the ships departed from and bask in biddings and purchase and promote shares Earlier than the daybreak of web, one needed to bodily go to the Bombay Inventory Alternate constructing to do that Nonetheless, with the web in place you merely want three things- A checking account, a buying and selling account and a DEMAT account A checking account since you would want your cash A buying and selling account, to help you commerce and make investments cash in an organization A DEMAT account to retailer the shares that you just purchase in a digital type A lot of the banks right now have began providing a three in 1 account with all three accounts encompassed inside your checking account Folks like us could be referred to as retail traders, that’s, widespread individuals who need to put money into the inventory market A retail investor all the time requires a dealer A dealer is somebody who brings collectively the client and vendor For us, our brokers might be our banks, a 3rd get together app or perhaps a platform Once we make investments cash by brokers within the inventory market, a dealer retains some cash as his fee.That is referred to as “brokerage price” Banks largely cost a brokerage price of round 1% However 1% is a bit excessive. That is not how a lot it needs to be In the event you look correctly, you’ll uncover platforms that cost a brokerage price of round 0.05% or 0.1% This brokerage price is a drawback for individuals who need to bask in lots of buying and selling of shares If lots of shares are purchased and offered in a day, some huge cash could be siphoned off as brokerage price However if you wish to make investments for a long run, then a excessive brokerage price would not make lots of distinction since you’d pay it solely as soon as So, investing and buying and selling are two various things Investing means placing in some sum of money within the inventory market and letting it keep there for a while Buying and selling means rapidly placing in cash at completely different locations and withdrawing from some locations This all occurs in fast succession In reality buying and selling of shares is a job in itself There are lots of people in our nation who’re merchants and do that job all day lengthy taking out cash from one share and placing it in one other taking out from one place, placing it in one other and incomes revenue within the course of An essential query that arises is whether or not you need to make investments cash within the share markets? Lots of people examine it with playing as a result of lots of danger is concerned in it In my view it’s right to say so as a result of that is certainly some form of playing If you’re not conscious of the kind of the corporate and its efficiency, the parameters of the corporate and its monetary report should you do not observe its historical past and accounting data then, in a means, that is akin to playing Since you would don’t know of how the corporate would carry out sooner or later You merely take heed to individuals saying that the corporate is doing effectively and we should always put money into it within the share market, in order that’s why you put money into it It’s best to by no means do that as a result of this can be very dangerous And clearly, when there are people who do that job day in and day trip, for examples the merchants, who’re specialists on this subject and have extra data concerning the inventory market They clearly would outperform the others as a result of they’ve an concept of how this all works So, for my part, you need to by no means straight put money into the share market and as a substitute depend on the specialists A really competent type of it’s mutual funds As a result of in mutual funds you do not straight resolve which firms you’ll put money into In mutual funds, you place your belief in specialists and let the specialists resolve which firms to put money into Infact lots of mutual funds put money into many alternative firms to minimise the probabilities of loss As an example I’ve given the instance of the East India firm.Buyers had rapidly realised that they need to not make investments their cash in a single single ship Investing cash in 5-6 of them would make sure that atleast one among them got here again Mutual funds work the identical means, investing cash in many alternative locations There is a superb app referred to as “kuvera” for investing in mutual funds Kuvera is an app that expenses 0% brokerage charges So, should you put money into mutual funds by this app, then it will retain 0% fee for itself Regardless of how a lot cash you make investments A query would then come up, as to how does it earn cash for itself? This app has specified that it earns cash by promoting the remainder of its funding merchandise However it has saved funding within the mutual funds fully free That is one thing distinctive and particular that I’ve by no means seen in every other app One other characteristic of this app is which you can set targets For instance, if you wish to purchase a home, or a automobile, you enter into this app the entire price of it what number of years down you need to purchase it and the way a lot cash you possibly can pay for it upfront Then this app, by using its algorithm and AI, will let you already know the mutual funds that you need to make investments cash in Utilizing the identical algorithm the app additionally lets you understand how to attenuate your tax The long run capital good points tax is what you need to pay once you make investments cash someplace So, this app, taking account of inflation will let you understand how a lot you need to make investments and take out wherein 12 months In order that you need to pay minimal tax So I might suggest that you just set up this app should you’re thinking about mutual funds investing And I might prefer to thank this app for sponsoring this video In the event you felt such as you learnt one thing new from this video, then share this video Write down within the feedback to let me know which academic and monetary matters you desire a video on We’ll meet within the subsequent video.Thanks..