> Convert physical shares to Demat accounts by April 1 for shareholders.
> Ensure brokers have updated contact details to prevent unauthorized transactions.
> IPO allotment no longer requires bank cheques; banks manage process after application form submission.
Interest is the amount charged for using borrowed money.
A stock exchange facilitates buying, selling, and trading of securities.
The securities market enables the transfer of funds from savers to investors.
The primary market allows the issuance of new securities by companies and governments.
Companies issue shares to raise capital from the public for business expansion.
Market capitalization is the market value of a company's outstanding shares.
The secondary market is where securities are traded after their initial issuance.
Diversification is spreading your investments across different assets to reduce risk.
Regularly monitor and review your investment portfolio to ensure it aligns with your goals and risk tolerance.
Investing wisely can help you achieve financial security and meet your long-term goals. By understanding the various investment options, risks, and strategies, you can make informed decisions to grow your wealth over time.
Securities are financial instruments that represent ownership or debt, such as stocks, bonds, and derivatives. Securities markets are where these instruments are bought and sold.
Risk refers to the potential for loss in an investment, while return is the profit or gain. Generally, higher returns are associated with higher risks.
The Indian securities market comprises primary and secondary markets. The primary market deals with the issuance of new securities, while the secondary market involves the trading of existing securities.
In the Indian securities market, issuers include government entities, corporations, and financial institutions that issue securities to raise capital.
Stockbrokers and sub-brokers facilitate buying and selling of securities in the markets. They execute trades on behalf of clients and provide advisory services.
An investment adviser provides guidance and recommendations to investors on investment strategies and portfolio management.
The time value of money concept states that a rupee today is worth more than a rupee in the future, due to its potential earning capacity.
A mutual fund pools money from investors to invest in diversified portfolios of stocks, bonds, or other assets, managed by professional fund managers.
Identify your financial objectives, such as wealth accumulation, retirement planning, or education funding.
Evaluate your willingness and ability to tolerate fluctuations in the value of your investments.
To report any fraud or scam, you can visit the following sites:
You can also email them directly at ignse@nse.co.in
Do's:
Don'ts:
A Mutual Fund is a collective investment scheme registered with SEBI (Securities Exchange Board of India). It pools money from individual and corporate investors and invests it in a diversified portfolio of financial instruments such as equity shares, government securities, bonds, debentures, and more. Mutual funds issue units to investors, and the value of these units appreciates based on the performance of the underlying securities in the portfolio.
The investment objectives outlined by a Mutual Fund in its prospectus are binding on the Mutual Fund scheme. These objectives determine the types of securities a Mutual Fund can invest in. Mutual Funds invest in various asset classes like equity, bonds, debentures, commercial paper, and government securities. The schemes offered by mutual funds vary from fund to fund, some being pure equity schemes, while others are a combination of equity and bonds.
Investors have the option to receive dividends, which are declared periodically by the mutual fund, or participate solely in the capital appreciation of the scheme.
Mutual Fund units are issued and redeemed by the Fund Management Company based on the fund's net asset value (NAV), which is calculated at the end of each trading session. NAV is calculated as the value of all the shares held by the fund, less expenses, divided by the number of units issued.
Mutual Funds are usually considered long-term investment vehicles, though there are several categories catering to different investment goals and risk appetites.
The cash you earn is mostly spent, and the rest is saved to meet future expenses. Instead of keeping the savings idle, you may like to use them to earn a return on it in the future. This is called Investment.
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All out equity capital of a company is partitioned into equivalent units of little categories, each called an offer. For instance, in a company, the absolute equity capital of Rs 2,00,00,000 is separated into 20,00,000 units of Rs 10 each. Each such unit of Rs 10 is known as a Share. In this manner, the company at that point is said to have 20,00,000 equity shares of Rs 10 each. The holders of such shares are individuals from the company and have casting a ballot rights.
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A derivative is a financial product whose value is derived from the value of one or more underlying factors, called underlying assets. The underlying asset can be equity, index, foreign exchange (forex), commodity, or any other asset. Derivative products initially emerged as hedging instruments against changes in commodity prices, and commodity-linked derivatives remained the sole form of such products for almost three hundred years.
Financial derivatives gained prominence in the post-1970 period due to growing volatility in the financial markets. Since their inception, these products have become very popular, and by the 1990s, they accounted for around two-thirds of total transactions in derivative products.
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A debt instrument represents a contract whereby one party loans money to another on pre-determined terms regarding the rate and periodicity of interest, as well as the repayment of the principal sum by the borrower to the lender.
In the Indian securities markets, the term 'bond' is used for debt instruments issued by the Central and State governments and public sector organizations. On the other hand, the term 'debenture' is used for instruments issued by the private corporate sector.
A substantial number of new companies float public issues. While many of these companies are genuine, some may seek to exploit investors. Therefore, it is important that an investor assesses the future potential of a company before applying for any issue.
Part of the regulations issued by SEBI (Securities and Exchange Board of India) includes the disclosure of 23 pieces of information to the public. This disclosure includes information such as the purpose of raising the money, the intended use of the funds, the expected returns, and more. This information is provided in a document called 'Prospectus,' which also includes details regarding the size of the issue, the current status of the company, its equity capital, its past and current performance, the promoters, the project, project cost, methods of financing, product and capacity, and more. It also contains mandatory information regarding underwriting and statutory compliances. This helps investors evaluate the short-term and long-term prospects of the company.
An Index demonstrates how a predetermined arrangement of share prices are moving to provide a signal of market trends. It is a basket of securities, and the average price movement of the basket of securities indicates the index movement, whether upwards or downwards.
Few examples of indices in the Indian stock market include BSE Sensex, Nifty 50, India VIX, Nifty 100, Nifty 500, Nifty Midcap 100, Nifty Next 50, BSE Small Cap, BSE Midcap, S&P BSE-200, and S&P BSE-500.
A depository is similar to a bank where the deposits are securities (such as shares, debentures, bonds, government securities, units, etc.) in electronic form.
An Initial Public Offer (IPO) is the offering of securities to the public in the primary market. It is when an unlisted company makes either a fresh issue of securities or an offer for sale of its existing securities or both for the first time to the public. This paves the way for listing and trading of the issuer's securities. The sale of securities can be either through book building or through regular public issues.
Dematerialization is the process by which physical certificates of an investor are converted into an equivalent number of securities in electronic form and credited to the investor's account with their Depository Participant (DP).
A bond is a fixed-income (debt) instrument issued for a period of over one year with the purpose of raising capital. The central or state government, corporations, and similar entities issue bonds. A bond typically represents a promise to repay the principal amount along with a fixed rate of interest on a predetermined date, known as the Maturity Date.
A Contract Note is a confirmation of transactions conducted on a specific day on behalf of the client by a trading member. It establishes a legally enforceable relationship between the client and the trading member regarding the purchase/sale and settlement of transactions. It also resolves disputes/claims between the investor and the trading member. It is essential for filing a complaint or arbitration proceeding against the trading member in case of a dispute.
A valid contract note should be in the prescribed format, contain the details of transactions, stamped with the requisite value, and properly signed by the authorized signatory. Contract notes are maintained in duplicate, with the trading member and the client each retaining one copy. After verifying the details contained therein, the client retains one copy and returns the second copy to the trading member duly acknowledged by them.
The sooner one starts investing, the better. By investing early, you give your investments more time to grow. The concept of compounding increases your income by accumulating the principal amount and the interest or dividend earned on it, year after year.
The three golden principles for all investors are:
To learn more about investing, you can check out our Fundamental Course or Value Investing Course.
Numerous individuals are contacted by anonymous numbers offering substantial returns on investments, such as Ponzi/pyramid schemes, loans, and currency scams. It's imperative to report these calls promptly.
Avoid subscribing to tip and call services that are offered. These tips are merely personal opinions, and one should not invest their hard-earned money based on them.
The flashy promotions on the internet may make share trading seem effortless. However, in reality, share market trading is a risky profession, and one can incur losses without proper knowledge.
If you're on social media, you might observe individuals setting unrealistic expectations regarding stock market rewards. Such behavior is often not compliant with legal standards and can mislead investors.
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