Sunday, 18 July 2010

Know Shares And Share Market To Make More Money From Stock Exchanges

If you have a desire to make money from stock market, read this article and the coming articles also. Here I wish to teach you more about stock market and how to make money from stock market in simple step by step instructions. Those who have a thirst to do stock market trade and make money, go ahead and learn how it is.

First let us start from the beginning. You may be aware that what stock is. A stock is a share in the ownership of the company. A company is a registered group (an association of person) for doing a business or service with the motto of earning profit out of it.

What is stock?

Share, equity, stock etc. are used for the same term share which means a share in the ownership of a company. The Total capital which is invested for the beginning of a business may be divided in to small units (say $10) and it is the face value of a share. And this share are issued to public which is called I.P.O (Initial Public Offering)

When you purchase shares of a company makes you one of the owners (Share holders) of the company and you have an ownership of a portion of all the assets of the company and you have the right to share the profit of the company. Apart of the earnings of the company may be divided to you called dividends. Then normally a share holder gets dividends from the company as a part of the earnings of the company and this is his direct earning from his investment in shares of a company and you will get it regularly according to the performance of the company.

An ordinary share holder who holds a few shares could not have the right to run the daily business of the company and he could not take decision of the daily matters of the company. He could cast a vote to elect the board of directors of the company. The company will rule over by the shares holders who has the holders of a majority of shares may be some corporate owners. You can satisfy with the dividend. But at the same time your liability is also limited only up to the extent of the face value of shares. If the company is liquidated you will get your share only after paying off the debtors and employees. But if there is any shortfall, your liability is only up to the face value of your share. Unlike partnership firms or sole proprietorship, you should not pay anything more than the value of your share.

Earlier you get a share certificate as the proof of your shares. But now shares are listed to any stock exchanges and your share transfer to a “demat” account and electronically recorded. No share certificate is needed and you can buy or sell any shares through computer and internet.

More about Stock in Next Post

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