Types of Share Trading/investment

Hi All,

In this post we will see 3 basic types of investments. As some of you might be knowing , they are

1. Investment


2. Trading


3. Speculation

1.Let us first understand what is this investment .... here what you do is , buy some "good" shares that has the potential to grow and leave your money safe for long term meaning years togther or 6 months or it depends. Here the advantages are
+ Anualised Dividends.
+ Enough period for your amount to grow with the companies .
+ Bonus shares might be announced.
+ One time research before choosing and periodical performance watch(Quarterly performance) will be enough etc.

2.Now the trading , its also called as day trading or intraday trading in stock markets. Here you invest in a day in bulks and then close all the trade in the same day . For example in India daily trading time closes at 3:30 pm IST. So here you should watch for the minute changes happening in the market within a day i.e. your analysis time or deciding time is less. Here you take the advantage of the small fluctuations in the market within a day.These small fluctuations happen because the stock market or the stocks in which you invest is volatile. Share value is volatile i.e. keeps changing frequently because huge amounts of shares are traded(bought and/or sold) in a day. So here you need to be very careful during the entire tradung time untill you close the trade for the day. Advantages here are
+ You earn in a daily basis. (Other than market holidays :P)
+ If shrude enough you can earn even in a down time !(Beacuse the daily fluctuations will always be there).

3. Speculation ..... its not advisable to go for this and its almost like a gambling with money in the stock markets is what we know. So didnt bother to know about it. Request from this side is please dont go for this.

As you can see here two important things are yet to be put.They include "disadvantages" of each type of investment/trading types and mainly "which type will suit us". These will be comming in future postings. Hope this post is clear....

Awaiting your valuable comments !!!

Understanding:Shares

Hello All,

Today lets understand what is this share and how did it come into existance? First of all we have to understand that there are 2 types of companies 1. Private Ltd(Limited) 2. Public Limited.

In this private limited companies , to start a company one person or few people join hands , put their own money / get some bank loans. This amount is called the capital and this will help them in running the entire company from buying raw materials to end.

So when these private Ltd companies want to expand themselves, they need to invest more isnt it ? so to collect this huge capital amount one of the ways they adapt is to ask public for the money. How do they do this is by introducing shares. For example say a company ABC wants 5 crore Rs, what they do is that they will announce that they are ready to give 50 Lakh shares of Rs 10 each. This Rs 10 is called the "face value" of the share. And number of shares is 50,00,000.

This private Ltd company now becomes a public Ltd company by offering shares . When this offering is done for the first time , it is called an IPO..."initial public offering". Shares here actually means sharing the companies owner ship i.e. when you buy shares , u become a part owner of the company and that is why you get the companies profit as a dividend every year :P ... Ok thats all for today .. There are more to know...This is just some intro for understanding shares better :P

Please let me know your comments :)