Stock Market

Investing in the Stock Market

Introduction

Stock market is the equity market, a public entity which offers trading of company stock and derivatives at the agreed price. The aim of investors is to generate returns on their invested capital in the stock market. The main purpose of the big companies or investors is not limited to make profit but also to outperform or beat the market. In this paper we will focus on the investment made in the stock market and what benefit investor get in investing in the capital market.

Hypothesis

Investing in stock market offer an opportunity to the companies in rising capital and hence, provide investors a potential high return than other investment considering high risk and high return scenario.

Literature Review

Stock Market has a set of rules and mechanisms that allow to purchase and sale of securities in open market. This has been termed as main financial market segments which comprises of high risk but give investors a high return sometime supernormal return. The peculiarity of this market is the fact that, as a rule, all securities are freely traded in the market. An investor can fully or partially recover the money invested by selling securities. This opportunity is free to contract allows the investor to choose the object of investment and the time at which he wishes to invest his money (Uchida & Susai, 2011).

The benefits enjoyed by the investors are as followed:

Profitability is high: investors when invest in the stock market can earn lot money in form of return taking in to the consideration of the rick which is associated with the returns. Mostly the investor expects that their invested money should get double in a short period of time and for that they invest in riskier shares which might in return give them huge amount. This usually not happen, before investing in the share, investors should know the proper knowledge regarding the market conditions and the condition of the company.

Variety of Alternatives Investment

There are numerous publicly traded companies which offer not only their shares but also other form of securities such as derivatives and financial assets such as bonds, debentures, bills, notes, etc. so, investors has variety of choices in which he can invest. However, this can benefit the company as well, like company can raise huge amount of funds through this process and most of the companies are doing this publicly raising funds. Distribution ...