It’s said that with money comes power, but just like having a sword won’t make any sense until you learn to strike enemies off with it. Similarly, having money won’t make any difference if you do not know how and where to invest it.
Fixed deposits (FD), recurring deposits (RD), or any kind of deposits are kind of backdated now. People nowadays have started investing in the equity market. As you might know, youngsters are also keenly investing in these markets, which means it is accessible to all those who have the basic idea of Equity Markets.
The site where shares and stocks of various companies are bought and sold is termed an equity market. Equity markets are often called share markets or stock markets. One of the most important characteristics of this market is that this market allows its traders, i.e., buyers and sellers to finalize a deal on the same platform as that of the stock market.
But, there is a slight difference in the meaning of the equity market in the Indian context, in comparison to the global context. Here in India, the equity market is popularly known as the stock or share market. Various entities are bought and sold over here. Whereas, if you look at the meaning of the equity market from the global perspective, there’ll a bit of difference. Equities here, are bought and sold over the counter or in exchange for stocks. As there are numerous traders of the same share, it makes it easier for the individual to grab a good deal in the equity market.
There are two types of Equity Markets:
- Primary Equity Market: These shares are provided to the general investors through the medium of IPOs. When the IPO shuts down, the shares are transferred and listed on the stock exchange.
- Secondary Equity Market: When one does not buy shares of a company through IPO, he can trade the shares in the secondary market. Here, the person has to invest by keeping in mind the entry and exit rate in the market.
Apart from these, the equity market also has some genuine benefits. Let’s have a look at them:
- The first and foremost benefit that the equity market provides is giving good profits to the stockholders even during Inflation.
- Talking about an investment that gives the highest returns, the first and foremost option that will hit an experienced guy’s mind is ‘investing in stocks’. If one invests on a long-term horizon, the chances of getting a higher return are excessive.
- A person having proper knowledge and who has gone through proper research about equity can make huge profits from the market, generally in the long-run horizon.
- One should never invest in any scheme or market without conducting proper research. Similarly, though equities are having a great base in the market which gives them good exposure, it also makes them arbitrary. Thus, market research is important before you invest in any stock.
- F & O are a better and safer option in the case of equities. Investing here will not only lessen the risks of loss but can also give you a good profit in long term.
- If you invest in the equity market, dividend issuance can help you in getting a good income. As issuing dividends is considered to be a corporate action, the enlisted companies share a part of the profits with their already existing shareholders.
These were some ways through which the equity market can be beneficial for an individual. Hope this helps in narrowing down your ideas about the equity market.
