Stock Market
Basic Knowledge Of Stock Market Explained in a Simple and Interesting Way
History Of Stock Market
The Birth Of The First Stock Exchange
The concept of stock market came in the form of a joint stock company in Europe. These joint stock companies were run by shareholders and investors. British East India and Dutch East India Company were also such joint stock companies.
These joint stock companies used to send their ships to different places and used to distribute the part of the earnings from those ships among the shareholders and investors of these companies.
The world's first stock exchange
The concept of stock market came in the form of a joint stock company in Europe. These joint stock companies were run by shareholders and investors. British East India and Dutch East India Company were also such joint stock companies.
These joint stock companies used to send their ships to different places and used to distribute the part of the earnings from those ships among the shareholders and investors of these companies.
India's First Stock Exchange
The Stock Exchange of India was started in 1875 during the British period by a famous businessman named Premchand Roychand. Premchand Roychand was a famous businessman of India who was known as “Cotton King” and “Bullion King”.
BSE ‘Bombay Stock Exchange’ was established in 1875 due to the efforts of Premchand Roychand. Bombay Stock Exchange is the first stock exchange of India and is considered to be the oldest stock exchange of Asia. Initially its name was ‘Native Share and Stock Brokers Association’. BSE is the 6th largest stock exchange in the world.
Then in 1992, NSE ‘National Stock Exchange’ was established to bring transparency in the equity market of India.
Definition Of Stock Market
Stock market means where shares of companies are bought and sold. It is also called Share Market or Equity Market. Here investors can become co-owner of the company by buying its share. Stock market is divided into two main parts.
Primary Market : Here the company issues its shares for the first time. Through IPO.
Secondary Market : Here investors buy and sell already issued shares.
There are two main exchanges in stock market
BSE-Bombay Stock Exchange
NSE-National Stock Exchange
Benefits Of Stock Market
- Wealth Creation: Potential for high returns over time.
- Liquidity: Easy to buy and sell.
- Diversification: Access to various sectors and industries.
- Dividend Income: Regular income from dividend-paying stocks.
Risks of Stock Market
- Prices Can Go Down: Stock values can drop suddenly, leading to losses, especially during bad economic times.
Market Risk: Risk of overall market decline.
Economic Conditions: Negative economic conditions affect stock prices.
Global Situation: Global events like wars or economic crises can make the entire market go down.
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