Foundamental of share market
The fundamentals of the share market include key concepts and principles that govern how stock markets operate. Here are some essential elements:
1. **Stocks and Shares**: Stocks represent ownership in a company. When you buy shares, you acquire a portion of that company.
2. **Stock Exchanges**: These are platforms where stocks are bought and sold, such as the NYSE or NASDAQ.
3. **Market Participants**: This includes retail investors, institutional investors, brokers, and market makers.
4. **Supply and Demand**: Prices of shares are determined by the balance of supply (selling pressure) and demand (buying interest).
5. **Market Capitalization**: The total market value of a company's outstanding shares, calculated as share price multiplied by the number of shares.
6. **Dividends**: Payments made by a company to its shareholders, typically from profits.
7. **Fundamental Analysis**: Evaluating a company’s financial health through metrics like earnings, revenue, and debt levels to make investment decisions.
8. **Technical Analysis**: Analyzing historical price movements and trading volumes to forecast future price movements.
9. **Market Indices**: Indicators that track the performance of a group of stocks, such as the S&P 500 or Dow Jones Industrial Average.
10. **Risk and Return**: Understanding the relationship between the potential risk of an investment and its expected returns.
These fundamentals provide a foundation for understanding how the stock market functions and how to make informed investment decisions.
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