Emerging markets like India are fast becoming engines for future growth. Currently, only a very low percentage of the household savings of Indians are invested in the domestic stock market, but with GDP growing at 7-8% annually and a stable financial market, we might see more money joining the race. It’s the right time for investors to seriously think about joining the India bandwagon.
Most of the trading in the Indian stock market takes place on its two stock exchanges: the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE has been in existence since 1875. The NSE, on the other hand, was founded in 1992 and started trading in 1994. However, both exchanges follow the same trading mechanism, trading hours, settlement process, etc. Almost all the significant firms of India are listed on both the exchanges. We provide calls in NSE; NSE enjoys a dominant share in spot trading, with about 70% of the market share, as of 2009, and almost a complete monopoly in derivatives trading.
The overall responsibility of development, regulation and supervision of the stock market rests with the Securities & Exchange Board of India (SEBI), which was formed in 1992 as an independent authority. Since then, SEBI has consistently tried to lay down market rules in line with the best market practices. It enjoys vast powers of imposing penalties on market participants, in case of a breach.
We’d all like our money to grow substantially without risking our original investment amount.
Unfortunately, this isn’t possible. Almost all investment involves some degree of risk. What’s important is that you understand and are comfortable with the risks you’re taking before you choose to invest.
Investment risk is the chance that your money will not perform in the way you want or need it to Investment reward is when your money does at least what you expect it to.
Higher risk often offers the potential for higher rewards, but it also comes with a greater chance of you losing money.
Lower risk normally has a smaller chance of loss, but the growth of your money will usually be less.
Hence, it’s advised to invest only the capital that you can digest to lose.
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