How It Works

• Companies list shares through an IPO (Initial Public Offering) to raise money.
• Investors trade those shares on exchanges such as:
  • NYSE and NASDAQ (USA)
  • LSE (London Stock Exchange)
  • NSE and BSE (India)
  • Tokyo Stock Exchange
• Stock prices move based on:
  • Company performance
  • Investor sentiment
  • Economic data (inflation, interest rates, GDP)
  • Global news and politics

Types of Market Participants

• Investors: Buy and hold for the long term (focus on value and growth).
• Traders: Buy and sell frequently to profit from short-term price changes.
• Institutions: Mutual funds, hedge funds, and pension funds that manage large sums of money.

Ways to Profit

• 1. Capital gains — Sell your stock for more than you paid.
• 2. Dividends — Some companies share a portion of their profits with shareholders. Example: If you buy 10 shares of Apple at $150 and sell at $180 → you earn $30 × 10 = $300 profit.

Risk

• Prices can drop suddenly.
• Emotions (fear/greed) can lead to bad decisions.
• Company bankruptcy = potential total loss of investment.
• Market volatility during economic or political uncertainty.

That’s why risk management and diversification are crucial.

How to Start

• Choose a brokerage: (Fidelity, Robinhood, Interactive Brokers, eToro, Zerodha, etc.)
• Research companies — use fundamental or technical analysis.
• Start small — you can invest even $50–$100 in fractional shares.
• Diversify — buy stocks in different industries.
• Hold long term — let compounding work for you.

Smart Investing Tips

• Invest regularly (use Dollar-Cost Averaging).
• Don’t panic during market dips — focus on fundamentals.
• Reinvest dividends for faster growth.
• Keep learning — follow market news, reports, and trends.