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Benefits of Investing in Shares

Investing in Shares gives you multiple benefits:

  • First and foremost, as you've seen, is the possibility of incredibly high returns
  • Secondly you can earn not just from capital appreciation, but also in the form of dividends
  • You get Bonus shares as and when they are announced
  • You are entitled to Splits and benefits from Corporate Actions of companies
  • Shares can offer considerable tax benefits. All dividends are tax-free, you pay only a 10% short term Capital Gains Tax on profits made within a year, and all profits earned after a year are exempt of long-term Capital Gains Tax
  • While you get the best out of your shares in the long term, your investment is perfectly liquid, as you can sell your shares and redeem your gains at any time

Diffrent ways in which one can invest in the stock market:

There are basically two ways that one can invest in share

  • You can purchase share from the Primary Market
  • Trade in the Secondary Market

Primary Market:
In the primary market securities are issued to the Public and the proceeds go to the issuing company. This is the first time the company may be selling It’s share, in an exercise known as an IPO-Initial Public Offering. Here you buy shares directly from the company

Secondary Market:
After the IPO, the company will be listed on a stock exchange like the NSE(National Stock Exchange)/ BSE(Bombay Stock Exchange).Now It’s share can be freely traded - bought and sold. This is not done via a direct transaction, but through Stock Brokers who act as facilitators between the companies and shareholders who want to sell and those wanting to buy at the stock exchanges.

You do not need a lot of money to start making money from Stock Market, unlike buying property and doing business. It requires very minimal time to trade - unlike building a conventional business. It’s ‘fast’ cash and allows for quick liquidation (You can convert it to cash easily any time when you require, unlike selling a property or a business). It’s easy to learn how to profit from the stock market.But You need to have your basics clear.

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