The stock market is quite the place if you feel like trying your luck to earn quick money. But, not all get big returns! Though there is no obligation on the number of stocks or shares you purchase, at the end of the profits determine the success rate of your investment. But, doing this makes you hunt for answers to a plethora of stock market questions.
There are millions of people buying and selling shares to see in what way they can make some profit. However, ask anyone as to how the market is doing, and they’ll be like, “it’s terrible and horrible. The market’s down.” Despite the stagnant answer, the common person still invests in the stock market thinking that it’s an easy way to make tons of money.
Well, why not? It’s a legal medium to accumulate wealth based on prediction of prices, right? If it was that simple, then why wouldn’t everyone who has luck in their favour become millionaires by now? There are so many questions revolving around the stock market that it becomes a difficult task to address all.
Procuring the complete knowledge of the stock market can help you answer a majority of questions. Still, then ones listed below are few that would reach out to a broader audience in making them understand the stock market through a better tonality. So, let’s take a look.
5 Stock Market Questions with Answers
Here’s an exclusive list of popular stock market questions and answers:
1. What determines the Stock Prices?
The company’s evaluation (based on assets, profitability, yearly income, profit to debt ratio, etc.) is what determines the market valuation of the company. Once the company goes public, then based on this valuation, the number of stock and shares prices are determined. Also, the key determining factor of the fluctuation of prices would be the buying/selling of shares.
The more people buy the shares of the company, the greater the price. The lesser number of people buy the shares, the lower the prices. There’s a fine line between the determination of prices of stocks/shares on the stock market. But other factors include the performance of the company, revenue gained, losses incurred, expansion of the company and much more.
2. How can you make money from Stocks?
The stock market opens up several doors for traders/investors to make money. But if you are wondering how? Then different ways are enlisted below.
- Capital appreciation earnings.
- Dividend earnings.
- Primary and secondary stock markets.
- Crunching numbers.
- Diversified portfolio.
- Avoiding herd mentality.
- Emotionless transactions.
Though the above-given methods are few of the ways to make money, it’s up to the stock market’s volatility and the nature of a person that decides the profit and loss quotient.
3. How can one buy Stocks?
Buying stock in the stock market is quite simple. Though the steps are lengthy, they are relatively straightforward. All of the various steps involved are provided below.
i. Stockbroker Selection
There are hundreds of stockbrokers and stock brokerage firms in the country you can choose from—the top stockbrokers in the country ae Zerodha, Angel Broking, 5paisa, Groww and many more.
NOTE – You will have to open a Demat/trading account with any one of these Stockbrokers to avail necessary services and offers.
ii. Selection of Stocks
Moving ahead, you will have to research on the stock you wish to purchase. You can use the respective stockbrokers trading tools to carry out your research. Even seeking guidance from stock market experts is a feasible option.
iii. Number of Shares to Purchase
After you have finalized which stock you wish to purchase, the number of shares that needs to be bought have to be decided. It’s all based on the investment type and the amount you are willing to invest.
iv. Stock Order Type Selection
Buyers/sellers can put in the order type and enforce a stop loss condition on the trading platform to avoid losses. Users can either do this or try managing their stock by themselves.
Also, do keep in mind that if you are willing to invest more in the stock market, then try to spread it out to create your stock market portfolio. It helps in recouping losses and gain a broader region of profits in the process. Necessary diversification helps in exploring newer areas of the market and provides more significant knowledge of the stock market itself.
4. Can I trade without a Stockbroker?
Trading without a stockbroker in India is “NOT” possible. Due to the several forgeries and other fraudulent cases that have taken place in the late ’90s and early 2000s, the government of India digitalized stock market trading.
All the stocks, shares, equity, commodity, derivatives, etc. are controlled by the NSDL (National Securities Depository Limited) and CDSL (Central Depository Securities Limited). Stockbrokers are merely depository participants (DP) with these organizations to allow users to gain access to these trading options from the government registered depositories.
5. Is becoming a millionaire a possibility by investing in the Stock Market?
Yes, you can become a millionaire through the stock market. It’s not about luck, but it’s about reading the market and determining your next move of buying or selling stocks. Furthermore, hard work, dedication and ethical thinking are the critical aspects in making at least 1000 rupees profit in today’s market.
Never be afraid of investing in the stock market. Well, it’s an excellent platform to make money in the long term. The more you invest, the greater you reap (well on the right investment, i.e.). Also, keep in mind that you will incur losses in the stock market. These losses will serve as the learning curve in making sound and sensible investments in the future.
Frequently Asked Stock Market Questions & Answers to Look For
To sum it up, the stock market questions are like a pandora’s box where there are no limits to the definite questions with relative answers. Though some might be standard, others need strong research-oriented answers which may/may not be true in practical terms.
From the perspective of an ordinary person, understand the basics of stock market does make the difference in investing in the stock market. However, once you dive deeper, the clauses for investing and trading opens up a whole new universe. Thus, look into various questions for your answers and see which stock market question helps you in making a better trader/investor.
Do you have any stock market question to ask us? Feel free to put your query on our Finance FAQ Portal