An Introduction To Stock Markets & Mutual Funds

Stock Markets and the Mutual Funds are two those platforms, where majority of the investment activities are carried out these days. Well, if we go by the recent trends then it would not be wrong to conclude that the stock markets and the mutual funds are the hottest platforms for the modern investors in the current days’ time. Moreover, the introduction of the several mobile applications dedicated to stocks and mutual funds had made it even easier for people (of all segment) to carry out investment activities in stocks and the mutual funds!

Moreover, if we follow the trends then we can also draw a conclusion that making investments in the stock markets and in the mutual funds are probably the smart things to carry out in the current day market. For a very long time, making investments in the stocks and in the mutual funds seemed to be a very complicated thing in India and most people were afraid of the process involved. The mindset among the common people of India was that the stockbrokers were corrupt; and they might simply make their own profit out of investors’ money. Unfortunately, this has been proved true also at many instances and that’s why a fear among the budding investors, without business background was developed, which prevented them to carry out investment activities.

Thanks to the growth and progress of our country, today due to PM Narendra Modi’s initiative of Digital India and with the support of Telecommunications Company Reliance Jio, almost everyone in the nation has access to internet. Moreover, the internet is available at the cheapest price in India in the whole of world and this is something has helped the people of all sectors in India. Of course, this advantage of digitalization has proved to be tremendously fruitful for the investors; and the hesitation of making investments due to the presence of broker in the middle has too been sorted out by the transparency provided by the internet.

Today, we witness transparency in the process of making investments and the online platforms are very clear with their terms and conditions, therefore the commission charged by them is something, which the investors can easily understand. The scope of cheating with the investors’ money has been reduced to negligible and the trust among the budding investors, who do carry a business background, has grown. Young students to employees of corporate and private sectors are today making investments in stock markets and in the mutual funds, just by the clicks in their mobiles and laptops.

Well, if you too are somebody who is looking forward to make investments in the stock markets and in the mutual funds and you must understand their concept first. The smart thing is to have an understanding of the investment platforms before making investment activities as that may lead to a bad experience!

What is a Stock Market?

A stock market, equity market, or share market is the aggregation of the buyers and the sellers of the stocks (also called shares), which represent ownership claims on businesses. These may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies, which are sold to investors through equity crowdfunding platforms. Investment is usually made with an investment strategy in mind.

In simple words, one can understand stock markets as the venues where buyers and sellers meet to exchange equity shares of public corporations. Stock markets are components of a free-market economy because they enable democratized access to investor trading and exchange of capital.

What is a Mutual Fund?

A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV in Europe (Investment Company with variable capital) and open-ended investment company (OEIC) in the UK.

In simple words, a mutual fund is a pool of money managed by a professional Fund Manager. It is a trust that collects money from a number of investors who share a common investment objective and invests the same in equities, bonds, money market instruments and/or other securities.