Brief Introduction about Shares

Definition of Shares

In general 'Share' means 'a part of'. here a share of a company means a part of a company. And in turn a person holding a particular share means that the person have some part of company's stake. And company is liable to that person for that stake.

Share is a document issued by the by the company. A share can also be referred as stock. A single transaction buy/sell is called as a trade and a place where multiple transactions(trading) takes place is called as share market.

Types of Share Market

Shares can be bought from two types of markets
-Primary Market
-Secondary Market

Primary Market means buying of directly from the company at the time of IPO and Secondary Market means buying shares in the stock market.

Types of Income from Shares

The Income which comes from shares is of two types Dividend, Capital Gains and Returns.

Dividend is amount which is a part of profits obtained by the company. Usually company's distribute its profits amongst the share holders in the form of dividend and this amount would be in proportion to the number of shares an investor is holding.

Capital Gains are the profits obtained by selling the shares that you are holding.

And Returns are sum of both Dividends and Capital gains of that share. Generally u can expect returns for a long term investment( a year and above).

It is not guaranteed that shares always brings you profits, Profits depends on the performance of the company. If the company is performing well the price of a share can go up and if the company is not performing well then it the price would go down.

So before investing in shares one should clearly go through with the company history, performance and future growth.

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