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Hey, fellow investors welcome back to our blog on how to stating investing in the stock market. Well, this is our first blog on the basics of investing with TWE. In this blog, we are gonna look at how to start investing in the stock market with some examples. This blog will help you to get understand what is the stock market and how to start investing.

Learning outcomes

• What is the stock market?
• How shares are listed in the stock market?
• What is an IPO?
• Stock market overview?
• How do people make money in the stock market?

First, we are gonna look at What is the stock market

What is the stock market?

The stock market is nothing but a place where both sellers and buyers trade stocks that are publicly listed. Not understood right?

Here is a creative

Here a buyer buys the stocks from the seller. The stock price will be set by the seller according to the trading price of the stock.

But to understand how stocks come into the picture. You need to understand what is an IPO.

What is an IPO?

IPO stands for Initial Public Offering. I assume that you might hear most of the time that a company has just declared its IPO or the IPO had just been listed. But what exactly is it right? Well this is the actual story

If a company wants funds for its expansion or any other purposes, it comes with an IPO into the stock market. Here the company will offer its shares to the public by fixing an amount for its shares.

For example

The above image gives you complete clarity. The company had come up with an IPO of 687 crore. In return, the company is offering its shares to the public

One share price is fixed at 285 – 300 rupees.

In this way, a company will list in the stock market.

But what happens after listing in the stock market?

Investors who purchased shares during the IPO can choose to sell their stocks after the company’s shares are listed and available for trading on the market.

How a company’s share price changes in the stock market

The price of a share changes for various reasons in the market. But the main reason could be the selling and buying pressure.

This can be explained with a real-time example.

Imagine visiting a shopping mall and stumbling upon a brand-new iPhone being sold at half the regular price. Who could resist such an incredible offer, especially if you already own one? Not a chance! You wouldn’t hesitate to grab that deal, and you can bet that others, just like you, would eagerly compete to get their hands on the discounted mobile as well.

This same applies to the share market as well. If a

Some of the significant factors that impact the share price

• Market Sentiment – Market sentiment in the stock market refers to the overall feeling or participation of investors in the stock market. It is also a collective perception of whether the market is expected to rise (bullish sentiment) or fall (bearish sentiment). Market sentiment can play a significant role in influencing stock prices and market trends, as it affects the buying and selling decisions of participants. So, the investor’s perception of the stock market matters a lot.
• Industry and Sector Trends – Industry and sector trends in the stock market refer to the overall performance and movements of particular groups of companies that operate in correlated businesses or industries.
• Supply and Demand – The supply and demand in the stock market means that the shares available in the market vs the demand for that shares in the market. If demand increases then the share price will rise same is the case if demand deceased the share price will drop.
• Political and Geopolitical Events – Political and geopolitical events represent the sudden changes in any policies or rate hikes. These events will significantly cause damage to the share market.
• Company’s performance – The company’s performance will directly accts the company’s stock price either in a positive or negative way.

How do people make money in the stock market?

There are numerous ways in which one can make money. Some of them are

• Buy and Hold: Buying the stocks and holding them for the long term is the most used strategy followed in the stock market. Every quality stock
• Swing Trading: Swing trading is a type of trading that involves taking advantage of the timing of the stock as well as the price swing. This type of trading requires technical analysis of a stock in depth. Typically swing traders hold the stocks for a few days to a few months.
• Growth Investing: Growth investment is a type of investment where one will invest in stocks based on the future growth prospects of the stock. The primary goal of the investor is to buy the stocks that are expected to record significant growth in the future.
• Dividend Investing: This investment strategy involves investing in stocks that deliver a good amount of dividends after declaring the results. Dividend stocks have a good dividend yield that comes along with the share appreciation.
• IPOs and New Listings: Generally, most of the stocks after listing in the stock market tend to perform really well. Some might rise 10%-50% on the listing day. So, in this way, one can make a huge profit in a few days.

Advantages and disadvantages of the stock market

Investing in the stock market has its own advantages and disadvantages. It’s our responsibility to know some of them

The advantages of the stock market are

• Potential for High Returns – Investing in high-potential growth stocks can offer you significant wealth appreciation. Some stocks can even give you double returns within a year or so.
• Diversification – Investors can make a diversified portfolio by investing in a wide range of stocks across different industries. There number of sectors where you can diversify your risks.
• Dividend income – The dividend income is the other source of income in which one can make money other than the share price appreciation. Some shares even deliver more than their share price value as dividends.
• Liquidity – The main advantage of the share market is that you can sell the shares at any time during the market hours without any difficulty. But in other assets like real estate and bonds, you need to wait a hell lot of time to make a trade happen.

The disadvantages of the stock market are

• Volatility and Risk – Volatility refers to the exponential price fluctuations of a stock over a specific period of time. This can highly impact the share price if the company gets bad remarks.
• Lack of Control –
• Education required – Before you get started in Investing in the stock market, you have to obtain a financial education. The tricky part is it can take a long time for you to master the stock market learning.
• Time and Effort – Share market profit is a time-consuming asset. Sometimes that might rise as per your expectations, but in some other cases, it will not work out. You need to wait for a long time to get good profits.

Timings and holidays in the stock market

The share market timing changes as per the country’s rules and specifications. But in the United States, the market starts at

• Pre-market trading: Typically starts at 4:00 AM to 9:30 AM Eastern Time (ET)
• Regular trading hours: 9:30 AM to 4:00 PM Eastern Time (ET)
• After-hours trading: Typically runs from 4:00 PM to 8:00 PM Eastern Time (ET)
• Monday – Friday

Holidays in the stock market

1. New Year’s Day
2. Martin Luther King Jr. Day
3. Presidents Day
4. Good Friday (NYSE early close)
5. Memorial Day
6. Independence Day
7. Labor Day
8. Thanksgiving Day
9. Christmas Day

Risks in the stock market

• Volatility –
• Liquidity Risk –
• Black Swan Events –
• Systemic Risk –
• Inflation Risk –

Conclusion

We have acquired a comprehensive understanding of how the stock market operates, from its basic principles to its advanced intricacies. Our confidence is fueled by the belief that in the upcoming days, we will offer a full suite of stock market services catering to beginners and professionals alike. Our aim is to empower individuals at all levels to navigate the stock market with ease and success.

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