INVESTMENT V/S TRADING?

 

INVESTMENT V/S TRADING                  HOW TO SELL YOUR COMPANY’S SHARES? If a company wants to sell its shares on the stock exchange, then this termed as “public listing”. If a company is selling its shares for the first time, then it is called IPO- initial public offering. That is, offering the shares to the public for the first time. During the old time, it was very easier to get this done. But today this procedure is very long and complicated, and so it should be. Because, think about it, how easy it is to scam the people. Anyone could get listen on the stock exchange with a fake company, and exaggerate the value and achievements of its company. They could lie to the people and would foolishly invest in his company. He then could abscond with the money.so, it has become extremely easy to scam somebody. India in its history, has been a witness to a lot of scams like these example, Harshad Mehta scam, satyam scam, they were all the same – fooling the people and getting themselves listed on the stock exchange. collecting the money and then absconding. as and when these scams happened, the stock exchange realized that they need to make their procedures stronger and scam proof. For this the resolutions and rules were made stronger due to which there are very complicated rules today. SEBI (Security and Exchange Board of India): It is regulatory body that looks into issues like which companies should be listed on the stock exchange. And whether it is being done in the proper manner or not if you want to do this, then you would have to fulfill the norms of SEBI. Their norms are very strict. i.e. There need to be a lot of checks and balances on the accounting of yours company. At least two auditors must have ha checked your company’s accounting. This entire process maybe takes around 3 years. More than 50 shareholders should be pre present in the company if you want a company to be publicly listed. When you go to sell their shares but there’s no demand for it amongst people. Then SEBI can remove your company from the stock market list.                           HOW CAN YOU BUY SHARES? Now, how can you invest money in the stock markets? During the times of east India company, one could go to the docks whare the ships departed from and indulge in biddings and buy and sell stocks. Before the dawn internet, one had to physically go to the Bombay stock exchange building to do this. However, with the internet in place you merely need three things- 1.Bank Account 2. Trading Account 3. DEMAT Account A Bank Account because you would need your money. Trading account to allow you to trade and invest money in a company. A DEMAT account to store the stock that you buy in a digital form. Most of the banks today have started offering a 3 in 1 account. With all three-account encompassed within your bank account. People like us would be called retail investors, that is, common people who want to invest in the stock market. A retail investor always requires a broker. Broker: A broker is someone who brings together the buyer and seller. For us, our brokers could be our banks, a third-party app or even a platform. When we invest money through brokers in the stock market, a broker retains some money as his commission. This is called “brokerage rate”. Bank mostly charge a brokerage rate of around 1%.but 1% is a little high. That’s not how much it should be if you look properly, you would discover platforms. That charge a brokerage rate of around 0.05% or 0.1%. this brokerage rate is a disadvantage for those who want to indulge in a lot of trading of stocks. If a lot of stock are bought and sold in a day, a lot of money would be siphoned off as brokerage fee. But if you want to invest for a long term, then a high brokerage rate wouldn’t make a lot of difference because you ‘d pay it only once. MORE DETAIL OF STOCK MARKET:  https://sudharmatimes.blogspot.com/2020/11/wath-is-financial-and-stock-market.html                                 INVESTMENT V/S TRADING So, investing and trading are two different things- INVESTMENT: Investing means putting in some amount of money in the stock market and letting it stay there for some time. TRADIND: Trading means quickly putting in money at different places and withdrawing from some places. This all happens in quick succession. In fact, trading of shares is a job itself. There are a lot of people in our country who are traders and do this job all day long. Taking out money from one share and putting it in another.      TRADING    INVESTING   Short-term   Price   Technical   Volatility   P/L   Borrow   Want   Noise   Long-term   Value   Fundamental   Risk   Goals   Save   Need   Signal   Taking out from one place, putting it in another and earning profit in the process.                                           CONCLUSION An important question that arises is whether you should invest money in the share markets? A lot of people compare it with gambling because a lot of risk is involved in it.in my opinion it is correct to say so because this is indeed some sort f gambling.  If you are not aware of the of the type of the company and its performance, the parameters of the company and its financial record. If you don’t observe its history and accounting information.  Then, in a way, this is akin to gambling. Because you would have no idea of how the company would perform in the future. You merely listen to people saying that the company is doing well and we should invest in it in the share market, so that’s why you invest in it. You should never do this because it is extremely risky. And obviously, when there are people that do this job day in and day out. for example the traders, who are experts in this field and have more knowledge about the stock market. They obviously would outperform the other because they have an idea of how this all works.so, in my opinion, you should never directly invest in the share market. And instead rely on the experts. A very competent form of it is mutual funds.to more information about mutual fund are read in incoming blog.

 

Major Differences Between COVID-19 and Seasonal Flu.

 

Differences Between COVID-19 and Seasonal Flu.

Ø SUMMARY

1.   What is seasonal flu?

2.   How dangerous is COVID-19?

3.   What are some differences between COVID-19 and influenza?

4.   How can I protect myself and others from COVID-19?

1.   seasonal flu

Seasonal influenza is characterized by a sudden onset of fever, cough (usually dry), headache, muscle and joint pain, severe malaise (feeling unwell), sore throat and a runny nose. The cough can be severe and can last 2 or more weeks. Most people recover from fever and other symptoms within a week without requiring medical attention. But influenza can cause severe illness or death especially in people at high risk.

2.   How dangerous is COVID-19

Although for most people COVID-19 causes only mild illness, it can make some people very ill. More rarely, the disease can be fatal. Older people, and those with pre- existing medical conditions (such as high blood pressure, heart problems or diabetes) appear to be more vulnerable.

 

3.  What are some differences between COVID-19 and influenza

The speed of transmission is an important point of difference between the two viruses. Influenza has a shorter median incubation period (the time from infection to appearance of symptoms) and a shorter serial interval (the time between successive cases) than COVID-19 virus. The serial interval for COVID-19 virus is estimated to be 5-6 days, while for influenza virus, the serial interval is 3 days. This means that influenza can spread faster than COVID-19.

Further, transmission in the first 3-5 days of illness, or potentially pre-symptomatic transmission –transmission of the virus before the appearance of symptoms – is a major driver of transmission for influenza. In contrast, while we are learning that there are people who can shed COVID-19 virus 24-48 hours prior to symptom onset, at present, this does not appear to be a major driver of transmission.

 

4.  How can I protect myself and others from COVID-19

a) Practice Social Distancing

• Avoid gatherings such as melas, haats, gatherings in religious places, social functions etc.
• Maintain a safe distance of at least one Metre between you and other people when in public places, especially if they are having symptoms such as cough, fever etc. to avoid direct droplet contact.
• Stay at home as much as possible.
• Avoid physical contact like handshakes, hand holding or hugs.
• Avoid touching surfaces such as table tops, chairs, door handles etc.

 

b) Practice good hygiene

• While coughing or sneezing cover your nose and mouth with handkerchief. Wash the handkerchief at least daily
• It is preferable to cough/sneeze into your bent elbow rather than your palms.
• Do not Spit or shout in public places to avoid the spread of droplets.
• Do not touch your eyes, nose and mouth with unclean hands.
• Ensure that the surfaces and objects are regularly cleaned.

 

Ø COVID-19

1.  Symptoms

2.  Prevention

3.  Treatments

1.  Symptoms- COVID-19 affects different people in different ways. Most infected people will develop mild to moderate illness and recover without hospitalization.

Most common symptoms:

1. fever
2. dry cough
3. tiredness
4. Less common symptoms:
5. aches and pains
6. sore throat
7. diarrhoea
8. conjunctivitis
9. headache
10. loss of taste or smell
11. a rash on skin, or discolouration of fingers or toes

2.  Prevention- Protect yourself and others around you by knowing the facts and taking appropriate precautions. Follow advice provided by your local health authority.

To prevent the spread of COVID-19:

Clean your hands often. Use soap and water, or an alcohol-based hand rub.

Maintain a safe distance from anyone who is coughing or sneezing.

Wear a mask when physical distancing is not possible.

Don’t touch your eyes, nose or mouth.

Cover your nose and mouth with your bent elbow or a tissue when you cough or sneeze.

Stay home if you feel unwell.

If you have a fever, cough and difficulty breathing, seek medical attention.

Calling in advance allows your healthcare provider to quickly direct you to the right health facility. This protects you, and prevents the spread of viruses and other infections.

Masks

Masks can help prevent the spread of the virus from the person wearing the mask to others. Masks alone do not protect against COVID-19, and should be combined with physical distancing and hand hygiene. Follow the advice provided by your local health authority.

 

3.  Treatments- To date, there are no specific vaccines or medicines for COVID-19. Treatments are under investigation, and will be tested through clinical trials. World Health Organization

Self-care

If you feel sick you should rest, drink plenty of fluid, and eat nutritious food. Stay in a separate room from other family members, and use a dedicated bathroom if possible. Clean and disinfect frequently touched surfaces.

Everyone should keep a healthy lifestyle at home. Maintain a healthy diet, sleep, stay active, and make social contact with loved ones through the phone or internet. Children need extra love and attention from adults during difficult times. Keep to regular routines and schedules as much as possible.

It is normal to feel sad, stressed, or confused during a crisis. Talking to people you trust, such as friends and family, can help. If you feel overwhelmed, talk to a health worker or counsellor.

WHAT IS THE FINANCIAL AND STOCK MARKET?

FINANCIAL MARKET Financial markets refer broadly to any marketplace where the trading of securities occurs, including the stock market, bond market, forex market, and derivatives market, among others. Financial markets are vital to the smooth operation of capitalist economies. A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, raw materials and precious metals, which are known in the financial markets as commodities. The term "market" is sometimes used for what are more strictly exchanges, organizations that facilitate the trade in financial securities, e.g., a stock exchange or commodity exchange. This may be a physical location (such as the NYSE (New York Stock Exchange), LSE (LANDON STOCK EXCHANGE), JSE (JOHANNESBURG STOCK EXCHANGE), BSE (BOMBAY STOCK EXCHANGE)) or an electronic system (such as NASDAQ). Much trading of stocks takes place on an exchange; still, corporate actions (merger, spinoff) are outside an exchange, while any two companies or people, for whatever reason, may agree to sell stock from the one to the other without using an exchange. Trading of currencies and bonds is largely on a bilateral basis, although some bonds trade on a stock exchange, and people are building electronic systems for these as well, to stock exchanges. There are also global initiatives such as the United Nations Sustainable Development Goal 10 which has a target to improve regulation and monitoring of global financial markets.                 TYPES OF FINANCIAL MARKET 1.CAPITAL MARKET: A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold. Capital markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments. ·  STOCK MARKET: A stock market, equity market or share market is the aggregation of buyers and sellers of stocks, which represent ownership claims on businesses. ·   BOND MARKET: The bond market (also debt market or credit market) is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the secondary market. This is usually in the form of bonds, but it may include notes, bills, and so on. 2. COMMODITY MARKET: A commodity market is a market that trades in the primary economic sector rather than manufactured products, such as cocoa, fruit and sugar.  Hard commodities are mined, such as gold and oil. Futures contracts are the oldest way of investing in commodities. Futures are secured by physical assets. 3. MONEY MARKET: The money market refers to trading in very short-term debt investments. At the wholesale level, it involves large-volume trades between institutions and traders. At the retail level, it includes money market mutual funds bought by individual investors and money market accounts opened by bank customers. 4.derivatives market: The derivatives market is the financial market for derivatives, financial instruments like futures contracts or options, which are derived from other forms of assets. The market can be divided into two, that for exchange-traded derivatives and that for over-the-counter derivatives. NOTE: [Mainly, we are read about the first market (CAPITAL MARKETS)]                             SHARE MARKET Come, let us talk about share market. What is share market? Why is it in place? how does it work? What are its advantages and disadvantages? And how you invest money in it. What is share market? Stock market, share market and equity market-all three mean the same. These are market where you can buy or sell a company’s shares. Buying shares of a company means buying some percentage of ownership of that company. That is, you become the holder of a percentage of that company. If that company make a profile some percentage of that profit would also be given to you. If that company incurs a loss, a percentage of that loss would also be borne by you. Telling you example of this on the smallest scale presume you have to establish a startup. You have 10,000 rupees but that not enough .so, you go to your friend and tell him to invest another 10,000 rupees and offer him a 50-50 partnership. So, whatever your company profits in future 50% of it would by your 50%of it would be your friend’s.in this case, you’ve given 50% of the share to your friend in this company. The same thing happens on a larger scale in the stock market. The only difference being, instead of going to your friend you go to the entire world. And invite them to buy shares in your company. HISTORY AND PURPOSE OF SHARES The origin of share markets dates to around 400 years ago. Around the 1600s, there was Dutch east India company, like the British east India company, there was a similar company in the country of Netherlands today, known as Dutch east India company. In those times people used to indulge in a lot of exploration using ships.  The entire world map had not yet been discovered so the company is used to send their ships to discover new land & trade with faraway places. The journey used to be of over thousands of kilometers abroad a sheep.  There was a huge amount of money required for this not one person possessed search amounts of money individually in those times. So, they publicly invited people to invest money in their ships.  When these ships would travel long distance to go to others land and come back with treasures from there.  They were promised to a share of these treasures /money eventually. but this was a very risky affair. because during those times, more than half of the ships failed to come back. They got loss, or broke down or got looted. Anything could happen to them.so investors realized the risky nature of this entreprise.so, instead of investing in a single ship, they preferred to invest in 5-6 of them. So that at least one of them had chances of coming back. One ship used to approach multiple investors for money.so, this created somewhat of a share market. There were open biddings of the ships on their docks. Docks are the places where the ships come out from. Gradually, this system became successful because the money crunch faced by the companies. Was supplemented by the common people. And the common people got a chance to earn more money. You must have read in the history books also. About how rich the English east India company became during those times. Today, each country has its own stock exchange and every country has become greatly dependent upon the stock market. WHAT IS STOCK EXCHANGE? Stock exchange is that place, that building where people buy and sell shares of the companies. The market can be divided into two types- the primary market and the secondary market. Primary market: primary market is where is companies sell their shares. The companies decide what exactly would be their shares prices. Although there is some regulation in this too the companies cannot maneuver too much because a lot of it depends upon the demand. How much prize are the people willing to pay for the company’s shares. If the value of the company is 1 lakh rupees, its sales 1 lakh of its shares and offers shares at rs1 per share. If its demand is high and a lot of people want to buy its shares, the company would obviously be able to sell its shares for a higher price. What the companies do nowadays is decide upon a range. There’s a minimum price and a maximum price. They decide to sell their shares within that range. How many shares can a company have? A point to be noted here is that every share of the company has equal value. It is upon the company to decide how many of its shares it wants to make. If the total value of the company is 1 lakh, then it may make 1 lakh shares of rs1 each, or it may 2lakh shares of 50 paise each. When companies sell their shares in the share markets, it never sells 100% of them. the owner always retains majority of the shares to keep possession of his decision-making power. If you sell the shares, then all the buyers of the shares would become owner of the company. Since they all become owners, they all can take decisions regarding that company. The individually who has more than 50% of the share would be able to make decisions regarding the company. Therefore, the founders of the company prefer to retain more than 50% of the shares. For example, 60% of the shares of Facebook are retained by mark Zuckerberg. The people who have bought shares of the company can sell it to the other people. this is called the secondary market. SECONDARY MARKET: Where people buy and sell shares amongst themselves and trade in share. The companies cannot control the prices of their shares in the secondary market. The share prices fluctuate depending upon the demand and supply of the shares.so the prices of the shares fluctuate depending upon the demand and supply. INDIA’S SOCK EXCHANGE  Almost every big country has its own stock exchange. There are two popular stock exchanges in India. One is the Bombay Stock Exchange (BSE) which has around 5400 registered companies. The other is the national stock exchange that has 1700 registered companies. With so many companies registered in the stock exchange, if we want to observe, overall, whether the price of the shares of the companies are moving up or down, how do we view this? To measure this, some measurements have been put in place- 1.SENSEX: Sensex shows the average trend of the top thirty companies of the stock exchange. Averaging out, whether the shares of the companies are moving up or down. The full form of Sensex, the sensitivity index, displays the same.  The number of Sensex, that it has reached 40,000 marks. The number itself means not a lot the value of this number can be understood only upon comparison with the past numbers. Because this number has been randomly decided. So, gradually, the Sensex has been rising and it has reached the 44,000 mark in the past 50 years. 2.NIFTY: There is another similar index- NIFTY- National+ Fifty. Nifty shows the price fluctuation of the shares of top 50 companies listed on the National stock Exchange.                                 CONCLUSION A stock exchange is an exchange where traders and stock brokers buy and sell shares of stock, bonds and other securities. It also offers facilities for issue and redemption of securities and other financial instruments. Stock issued by listed companies and unit trusts, bonds and pooled investment products can be traded on a stock exchange. A stock exchange functions as a 'continuous auction' market where transactions are conducted between the buyers and sellers. A stock exchange plays an important role in the economy. It helps to raise capital for business, mobilize savings for investment, facilitates the growth of companies, and enables profit sharing. It assists in creating investment opportunities for small investors, and raising capital for development projects taken up by the government. It acts as a barometer of the economy.