Share Prices – A perfect example of demand and supply concept

in Stock

Equities, stocks and company shares are all synonyms for SHARES. Share price on the other hand represents the value of a single saleable stock of a company. When a buyer purchases even a single share he automatically becomes the share holder of that particular company.

The trading of stocks is typically done in stock markets. But a retailer or small investors need not go to market to buy and sell stocks. There are middlemen or brokers who do the job of buying and selling on your behalf for a nominal commission. These are called stock brokers or share brokers. Share prices change everyday. The change is dependant on various market forces and triggers.

The stock prices depend on one of the most fundamental concepts of economics and the thumb rule of market economy; demand and supply. If a particular stock is in demand, for whatever reason, the price shoots up. In contrast, if the demand is less then the valuation of that stock automatically comes down.

The fundamental rule of every investment is returns. Irrespective of what avenue you choose, your investment is expected to provide returns in the form of interest, dividend or consolidated amount after maturity which includes appreciation too. Shares are no different. The reason for investing in shares is to fetch high returns. This avenue is risky as compared to other time tested and traditional investment products.

Share market news helps minimize the risk. Stock market news can be accessed from the following sources.

1. Newspaper and magazine - These typically provide long term views or perspective of companies. They also provide various financial details including information about a company's book order position, EPS and book value.

2. Television - This platform provides stock tickers and discussions which help retail investors in selecting the right stock.

3. Online - Websites provide investors with an array of services. This includes stock prices, history, market sentiment, meanings of various technical terms etc.

Fixed deposit schemes have once again become popular with the masses. The increase in deposit rates have forced investors to return to this time tested investment option.

Below mentioned are some of the salient features of fixed deposits.

1. Different banks offer different interest rates. Choose a bank which gives you the maximum returns.

2. The period of fixed deposit is also important. If you are sure that you won't require the funds in the near future then invest in longer periods; because it typically fetches more returns.

3. However, on the flip side, there is a heavy penalty if you withdraw your fixed deposit prematurely.

Apart from banks, even companies’ offer fixed deposit investment option. Companies generally offer higher interest rates than banks. One of the advantages with fixed deposit is that you can get a loan of up to 80% on the amount deposited.

Author Box
RubenMarcus has 22 articles online

HDFC Securities is a leading stock trading company which has been operating for over 10 years and serves a diverse customer base of retail and institutional investors. HDFC Securities provides a seamless online real-time platform to trade in stocks where one can buy or sell shares on both the NSE and BSE. HDFC securities keeps you updated with the latest news in IPO along with a complete list of forthcoming IPOs and the best performers.

Add New Comment

Share Prices – A perfect example of demand and supply concept

Log in or Create Account to post a comment.
Security Code: Captcha Image Change Image
Related searches:

Share Prices – A perfect example of demand and supply concept

This article was published on 2011/12/27