The-Stock-Market-Explained 2 2.pp. tx
- 1. The Stock Market Explained The stock market is a network of exchanges where publicly traded companies' shares are bought and sold. It's a vital part of the global economy, enabling investors to participate in the growth of businesses and potentially earn returns on their investments. vs Presented by Vikrant singla Siddharth Sharma
- 2. What is the Stock Market? 1 Public Exchanges The stock market is made up of public exchanges where investors can buy and sell shares of publicly traded companies. 2 Price Discovery Stock prices fluctuate based on supply and demand, allowing the market to determine the fair value of a company's shares. 3 Investment Opportunities The stock market offers investors a chance to grow their wealth by buying and selling stocks of promising companies.
- 3. How the Stock Market Works Trading Platforms Investors use online brokerages and trading platforms to execute buy and sell orders in the stock market. Stock Exchanges Major exchanges like the BSE and NSE act as centralized marketplaces where stocks are traded between buyers and sellers. Price Discovery Stock prices fluctuate based on the balance of supply and demand, reflecting investors' assessments of a company's value.
- 5. Bombay Stock Exchange (BSE) •Founded: 1875 •Location: Mumbai, India •Significance: ◦Oldest stock exchange in Asia ◦Among the top 10 largest stock exchanges in the world by market capitalization •Key Indices: ◦SENSEX: Benchmark index tracking 30 large, well-established companies across sectors ◦BSE 100 & BSE 500: Broader market indices covering 100 and 500 companies, respectively •Functions: ◦Provides a platform for trading in equities, debt, derivatives, and mutual funds ◦Supports corporate financing through IPOs and listings •Technology: ◦Known for advanced trading systems with high speed and reliability ◦First in India to offer an online trading platform (BOLT - BSE Online Trading) BOMBAY STOCK EXCHANGE (BSE)
- 7. Introduction: Established in 1992, the NSE is India’s leading stock exchange, known for its advanced technology and transparency. Significance: •Largest Exchange in India by trading volume and market capitalization. •First Electronic Exchange in India, pioneering screen-based trading and digital systems. Key Indices: •NIFTY 50: Benchmark index tracking the performance of 50 top companies across various sectors. •Sectoral Indices: NIFTY Bank, NIFTY IT, etc., providing insights into sector-specific trends. Products & Services: •Equities: Stocks of listed companies. •Derivatives: Futures and options for hedging and speculation. •Bonds & ETFs: Fixed-income securities and Exchange-Traded Funds. Global Recognition: Ranked among the world’s top exchanges by market NATIONAL STOCK EXCHANGE (NSE)
- 9. WHY THERE IS NEED OF SEBI Investor Protection: Prevents fraud, market manipulation, and insider trading, ensuring that investors can trust the market. Market Regulation: Oversees stock exchanges, brokers, mutual funds, and other entities, maintaining fair practices and market integrity. Transparency and Fairness: Enforces disclosures by companies, so investors have access to accurate, timely information for informed decisions. Prevents Market Manipulation: Detects and penalizes price rigging and other unfair activities to keep markets stable. Promotes Market Growth: Encourages innovation, technology adoption, and market expansion, contributing to economic development.
- 10. Bull vs. Bear Markets Bull Market A market characterized by rising stock prices and investor optimism, often driven by strong economic conditions. Bear Market A market characterized by declining stock prices and investor pessimism, often driven by economic downturns or uncertainty.
- 11. Factors Affecting Stock Prices Economic Conditions Factors like GDP growth, unemployment, and inflation can influence investor sentiment and stock prices. Company Performance A company's financial health, earnings reports, and future outlook can significantly impact the price of its stock. Geopolitical Events Global events, such as trade disputes, political instability, and natural disasters, can introduce volatility into the stock market. Investor Sentiment The collective mood and expectations of investors can drive stock prices up or down based on fear, optimism, or uncertainty.
- 12. Investing Strategies 1 Long-term Investing Buying and holding stocks for an extended period, focusing on the long-term growth potential of companies. 2 Value Investing Identifying undervalued stocks with the potential for significant price appreciation as the market recognizes their true worth. 3 Diversification Spreading investments across different asset classes and sectors to reduce risk and maximize returns over time.
- 13. Avoiding Common Investing Mistakes 1 Lack of Diversification Concentrating investments in a single stock, sector, or asset class can expose portfolios to excessive risk. 2 Emotional Investing Letting emotions like fear or greed drive investment decisions can lead to poor timing and suboptimal returns. 3 Overtrading Frequent buying and selling of stocks, often driven by a desire to "time the market," can result in high fees and lower returns.
- 14. Diversifying Your Portfolio Asset Class Benefit Example Stocks Long-term growth potential S&P 500 index fund Bonds Stable income and lower risk Government or corporate bonds Real Estate Hedge against inflation Real estate investment trusts (REITs) Alternative Assets Diversification and portfolio protection Gold, cryptocurrencies, or commodities
- 15. The Future of Stock Investing Technological Advancements The rise of fintech, artificial intelligence, and blockchain technology is transforming the way investors participate in the stock market. Increased Accessibility Mobile trading apps and online brokers are making it easier for individual investors to access and invest in the stock market. Sustainability Focus Investors are becoming increasingly conscious of environmental, social, and governance (ESG) factors when evaluating investment opportunities.