Stock Market: Guide Line  Beginners to Intermediate Guide 

What is the stock market and how can young people invest here?

Stock Market: Guide Line  Beginners to Intermediate Guide
Stock Market: Guide Line  Beginners to Intermediate Guide 

Despite the economic crisis in  this year, the positive performance of the stock market is being appreciated and the government is encouraging people to invest in it.

Usually when a young person starts his first job , he is given various tips on how to save and invest.

But often investing in the stock market is not included in these tips. So what is the stock market and how can young people invest here?

To find out, we spoke to a reporter covering the stock exchange, including brokers, traders, and investors.

What is the stock market?

In common parlance, this market is a place for buying and selling shares of companies. One share of any company is a part of it.

Suppose a company is worth Rs. 100 and you have bought shares of Rs. 50 then you will become the owner of 50% of its shares.

The companies listed here are "listed" public limited companies.

To enter the stock market, these companies have to go through complicated steps and meet certain conditions. At present Pakistan Stock Exchange has 542 registered companies belonging to 35 different sectors.

According to the Pakistan Stock Exchange's website, it has about 400 active members, ie brokers, through whom the buying and selling process in the market is conducted.

Brokers actually act as guarantors on behalf of the investors and in order to invest in market shares you need to have an account with a broker.

Money is also transacted through this account and also buying and selling of shares.

Some of these brokers have their own brokerage houses where different traders are with you to help you with different buying and selling strategies. However, you can buy and sell without the help of a trader.
How to invest in a stock exchange

To invest in the stock market, you must first open an account with an active broker.

In this regard, there is a list of brokers on the website of Pakistan Stock Exchange.

This is similar to opening a bank account, however, it requires different documents depending on the broker and similarly the amount to be deposited initially may also vary depending on the broker.

You also have the option of 'Leverage' after opening the account. Leverage is actually an agreement between the broker and the investor under which you can charge more for the investment based on the amount initially deposited.

However, it has to be repaid with interest and new investors are generally barred from investing on leverage basis.

In addition to Saturdays, Sundays and any other public holidays, you can buy and sell stocks in the market during fixed hours.

Everyday fluctuations in share prices can be seen from other sources besides the website of the stock exchange.

Similarly, on the one hand, there is trading, that is, short-term, on the other hand, investing or long-term investment. Quick stock trading means you buy and sell stocks in days. You can buy and sell multiple stocks in one day.

It is more profitable but also more dangerous.

Similarly, with good strategy, long-term investments or stocks can be 'held', which can lead to future profits.

In addition, long-term buying of stocks of large and profitable companies is expected to yield dividends. Dividends are actually the profits of a company which are either distributed among the shareholders or used for reinvestment in the company which increases the value of the stock.

That is, if the company you bought stocks from makes a profit, you will also make a profit because you are now a part of it, it will either be in the form of dividends, or the price of the stock will rise. In the case of.

The company can pay dividends more than once a year.

Why invest in the stock market?

Why invest in the stock market?

Why invest in the stock market?

Jahanzeb Tahir says that when he was advised to invest in the stock market, even though his salary was only Rs 18,000, he thought this was the best option.

"You need a lot of money to invest in real estate, gold, business, etc. While investing in stocks is very easy and can be started with a small amount."

"My strategy right now is to hold stock for a long time and build my portfolio. It's a game of patience, I'm tempted to trade, but I know I'm playing a long game. "

"The stock market gives you another source of income besides a job, and that's my strategy right now," he said.

"Through the stock market, you can invest in areas you can't even think about," said a Karachi-based broker.

"Suppose our analysis shows that the construction sector in Pakistan will grow in the coming days and this will benefit the glass, cement or steel companies," he said. Even if you set up a factory, you will need at least five years to set it up.

"On the contrary, you can invest in any cement or steel company and be a part of this economic growth."

Areeba Shahid, a journalist reporting on economic issues, said that the stock market can be profitable for you if you do not invest in speculation and you can do all this at home.

A broker from Karachi said that the stock market is also a good way to support business and raise capital.

He said that if a business needs capital then he can use the stock market for this purpose and by registering here he can sell his shares and raise more capital.

However, listing a company in the stock market is a long and complicated process and the process is not easy due to various SECP conditions and heavy fees for IPO.

However, all these people agreed on one thing and that is that it is very important to read about companies before investing in the stock market.

Documents relating to the companies are available on their websites and information regarding the proceedings of the board meetings held by them is also made public.

Concerns about speculation, the middle class and the stock market

Concerns about speculation, the middle class and the stock market

Concerns about speculation, the middle class and the stock market

The broker we spoke to from Karachi said that the impression was wrong that the market as a whole was a betting market.

"This is not possible with companies worth billions of dollars, yes it will happen somewhere but now there are no days like 2007 or 2008 and the rules in the market have become very strict," he said.

Talking about this, a trader said that this happens on a small scale and even those who do quick trading do it, but in the end, this market shows itself to those who do it and they suffer a total loss. Is.

Areeba Shahid says that this market is not suitable for the middle class and those who are ignorant of economic affairs.

He asserted that his confession had been obtained through torture, and that his confession had been obtained through torture.

"Similarly, when people invest in a market that is unfamiliar with economic issues, they are often fooled by traders and often suffer from inexperience," he said.

Talking to a trader about this, he said, "If I answer honestly, why would I waste my time on such a light investor.