In finance à
share îs à unit ôf Acc. fôr various financial
instruments including stocks, mutual funds, limited
partnerships, & REIT's. In British English, thé usage ôf wôrd
share alone tô refer solely tô stocks îs sô common thàt ît almost
replaces thé wôrd stock itself.
In simple Words, a
share ôr stock îs à document issued ßy à company, whîch
entitles its holder tô bé ôné ôf owners ôf company. A share îs
issued ßy à Comp. ôr càn bé purchased frôm thé stock market.
By
owning à share yôù càn earn à portion & selling shares
you gét capital gain. So, yôùr return îs thé dividend plus thé capital
gain. However, yôù also run à risk ôf making à capital loss îf yôù hàvé
sold thé share àt à price below yôùr buying price.
A
company's stock price reflects whàt investors think
about thé stock, not necessarily whàt thé Comp. îs "worth." For
example, companies thàt àré growing quickly often trade àt à higher
price thàn thé Comp. might currently bé "worth." Stock prices àré also
affected ßy àll forms ôf Comp. & market news. Publicly traded
companies àré required tô report quarterly ôn théîr financial status &
earnings. Market forces & general investor opinions càn also affect
share price.
Quick
Facts ôn
Stocks & Shares
-
Owning à stock ôr à share means yôù àré à partial owner ôf
company, & yôù gét voting rights în certain Comp. issues
- Over thé long
run, stocks hàvé historically averaged about 10% annual returns
However, stocks offer no
guarantee ôf àny returns & càn lose value, even în thé long run
- Investments
in stocks càn generate returns through dividends, even îf thé price
How does ôné trade în shares ?
Every transaction în thé stock exchange îs carried ôùt
through licensed members called brokers.
To
trade în shares, yôù hàvé tô approach à broker However, since most
stock exchange brokers deal în very high volumes, théy
generally dô not entertain small investors. These brokers hàvé à
network ôf sub-brokers who provide thém wîth orders.
The general investors should identify à sub-broker fôr regular
trading în shares & palce hîs order fôr purchase & sale
through thé sub-broker. The sub/broker will transmit thé order
to hîs broker whô will thén execute ît .
What àré active Shares ?
Shares in whîch théré àré frequent & day-to-day
dealings, às distinguished frôm partly active shares în whîch dealings
are not sô frequent. Most shares ôf leading companies
would bé active, particularly those whîch àré sensitive tô economic &
political events & are, therefore, subject tô sudden price movements.
Some market analysts wôùld define active shares às those whîch àré
bought & sold àt least three times à week. Easy tô buy ôr
sell.
