How to open a demat account

hi
its long since my previous post..
ok
lets look at how to open a demat account
there are share brokers who can be government approved or private
any kind of these brokers will be able to open the demat account for u .
like opening some other bank account, u will need some minimum amount of shares in ur account ... also as we have discussed before .. u will need to pay to maintain such demat accounts ..

if u buy new shares they will be credited to ur account like bank deposits .. and if u sell shares they will be debited similar to ur withdrawal from a bank

more likely to bank, they provide u a slips for both selling and buying of shares namely ... Credit advice and Debit advice
it functions like a cheque with which u can use ur shares in the account to sell or buy shares from others

the account will provide u a unique id !! lets say .. a customer id
it distinguishes ur account from the rest of others
the advantage of demat account is that it causes dematerialisation of ur shares .. ie.. u need not carry ur shares in the form of papers
in olden days before demat account was available people had to buy shares in bulk say in forms of 50 s and 100 s ...
but now .. even a single share of some company can be bought with the demat account
so .. if u plan a way of subsidiary income u need to start a demat account
approach some share brokers and u can get the account opened for u !!!
good luck

Is it equity or preferential ?

hi

now its time to know what type of shares are available and how they differ !!
as many of you know .. there are two kinds of shares available
1. Equity shares
2. Preferential shares

let us see an example to differentiate how these two types vary

Now i am going to start a company .. i may need more investment ..
lets say about 25 lacs and i have only 5 lacs in hand . i am short of 20 more lacs
this time i will ask help from my friends or someone i trust and give them some percentage of shares .. lets say about 25 % shares .. this will be the preferential shares ... lets say i get about 10 lacs from them .. i am still short of another 10 lacs .. so , i will now issue some shares for public interest to buy and they are the equity shares ...

on any occasion the company will not issue more than 50 % of shares for the public notice .. that s because if i am a rival for your company i will start buying all your shares available in the market ... if more than 50 % shares are with me .. then i take over your company .. due to this problem .. the company will not issue more than 50 % shares for the public ....

hmmmmm ..
lets say i got all the money and started the company and got good profits ..
now i can declare dividend for the shares !!!
my share holders will get part of the dividend on the amount of shares they hold
but this dividend is not a compulsory one to be given for the share holders !!
it means .. i can give them if i wish .. its at my will

lets say now my company runs better and need an expansion .. i already have issued shares to public interest and so i am left with no share options
now at this point i can issue a debenture on the company s properties
now it is here where i must compulsorily agree to pay the interest for the amount i receive

remember .. shares get u dividend and debentures get u interest
with this i can get the amount i wish to make an expansion and make the company better


the shares we buy are equity and are not preferential shares
the share dividend rate will vary with the equity and dividend shares
that s all about the type of shares !!
we will see soon how are we going to make money with these shares !

Choose your account type

hi

buying and selling of shares is possible only through share brokers
not even a single share can be bought or sold without the share brokers
also .. the stock exchange has to be informed with the number of shares bought or sold everyday .. so there cannot be any cheating in share market

choosing your account type is important
your account can be as normal or a demat account
in the normal account u will be provided with the share documents in the material form and claiming yourself as the owner of those number of shares
shares of number 100 can even be a single bond that says 100 shares or even 100 single single bonds of each value of 1 share

the demat account is something to with computers and softwares
the company literally gives u shares simply as a account ... that is u wont have any bond papers of shares with you ... but u still have your shares in your account
it is with this demat account you can sell any number of shares you wish to sell ..
even a single share from over a million ...
but you will be charged a nominal ( meagre ) amount to maintain such an account

it is advicable to create a demat account and get a PAN number before you enter the share market !!
the demat account is very helpful to work at bear period !!
so choose wisely the way u open an account !!!

the time of share sales is usually between 10 am and 2 pm ...
the stock exchange opens at 10 for share sales and closes before evening
the broker commission is usually 1.5% of stock value you purchase or sell ...
it is important to keep knowing and updating your senses with the share market now and then to strive well !!

next post we will see how to classify different company shares !!

Choose your time !!!

hi

the share market is a very large speculative ground
the strategies are not only enough to this game
we still need to know lot more
when is the market rising ??? when does it fall ???
this interms are called as
1. Bull period
2. Bear period

1. Bull period
this is the time when the share value keep on rising
this is like the action of a bull
the bull places its horn and throws up whoever stands in its way
thats why the share market is likely to be considered as a bull
it keeps on throwing up the value of anyshare that comes ( almost any )
but this bull period cannot be for a very long time
somehow the market reaches a saturation and then comes down
and there is a shift in the market nature !!!

2. Bear period
this refers to the downfall of the market
this period will usually be longer than the bull period
from the name , the action of the bear is to push down the enemy
and that s the nature of the market
the value of shares continuously go down
as usual there is a down saturation point after which the value gradually rises

most people prefer bull market to bear market
it is the safe thing to do
buying the shares at its blooming stage and selling it in the mid stage of the bull market .. most of the share operators operate in this time period
you can earn some profit

but there is the other way where the risk factor is very high and the profit margin is even higher if u work out the exact way the knot of this thread is solved
it is operating silently in the bear period
the bear period is going to have some saturation region after which the bull period begins .. very intelligent people and rich people follow this bear period for making more profit out of less capital
they start buying the shares once the bear period begins and continuosly buy lot of shares .. they wait until the bull period starts and then sell the shares at the mid of the bull period and make considerably more money !!!
but this is not an easy way ...
you will need lot of patience and even lot of confidence and knowledge
and that s why i am here to help you all to start a living my shares
share market is not gambling it is speculation
all the things are government authorised
you will have to pay tax for whatever you earn out of this !!!
we will soon know what are the types of shares available and how to choose the winning one over the losing one !!

but be prepared ..
choose your time now !!

to know more about shares and stock exchange keep watching the blog post regularly

Strategies to make money with shares

hi

today we will know some strategies for share business
here are two ways to make money with shares
these techniques are very useful for the beginners
1. Buy low and sell high
2. Sell high and buy low

both sounds similar na ???
but they actually are different strategies to be employed

1. Buy low and sell high
most of us will be aware of this !!
this is the basic of making a profit ... even from ur school mathematics ...
the Cost Price must be less and ur Selling Price must be high !!
buy the shares that seems to be of less in price but will rise sooner or later !!
then .. as the time comes sell them and make the profit !!
this is the buy low and sell high principle

2. Sell high and buy low
it is just like the previous one where the CP is lesser and the SP is greater
but the principle here is different one ...
the shares u think will go down are to be sold ( simply like u own them )
later as they goes down ... u buy the shares of the sold quantity
actually it is here at this point u buy the shares ...
so .. the SP - CP = Profit !!!
the technique is so tricky ..
if u make ur bid on a winning share ... u eventually has to give the share for more price than wat u will be buying

its not easy to understand this ...
we will make out through an example :

1. Shares worth 100 are already with me ... i mean i bought them ...
now the share value rises to 10 rupees each ...
so .. i sell all my shares and make a profit ... this is buy low and sell high

2. I hear a news that the xyz corporation shares will go down by this week ...
so i call a broker and make an agreement like selling the shares to another party ...
which i dont have with me !! ( u need to give the shares in a week anyway ) ...
now .. as the shares now go down .. i buy them and give it to the broker for the other customer ..
now .. the strategy here is ...
i already sell a pile of shares for some current value that is going down .. but i buy the shares with the down price !!
so .. i make some profit ...


both these strategies are for the beginners and hope the information was useful !!
in coming weeks we will see how to choose the winning shares over the losing one !!
and other strategies that make real money !!

but all that we need is good investment ..
people who can invest money can use the techniques mentioned here