Hey Bloggers… 

I am back with the next part of the basics of the stock market.

Investing in the share market truly includes some risk for the ones who are small investors who want to l invest for a shorter period of time. My piece of advice here is to start with a smaller amount but to be stable for a longer period of time. 

When you invest in the share market, you basically get two types of incomes from there.

1. From the fluctuations of the price of shares/stocks: understand it with an example. Let's say that you bought 1 share of Reliance limited for Rs. 2000. You kept this share in your account for 6 months. After these 6 months when you decide to sell this share, you see that the price of this share now is Rs. 2150. So you sell it. That means in these 6 months you earned Rs. 150. Here, I have a tip for you, instead of selling it after 6 months, try to sell it after 1 complete year, by this way you can have a tax exemption also on this income just by following some conditions. In simple words, you can make this income tax-free as well. Isn't it nice. 
2. Return of Investment: try to understand this term. You will get some return on the investment that you have made. Let's understand it from the same example. You bought the share of Reliance Ltd. on 1.4.2018. and it is 30.4.2021 today and you are still holding that share. That means you have this share for more than 3 full years (in the, we assume the start of a year from 1st of April and ending on 31st March every year). Now, Reliance Ltd is sharing a part of its profit to all its shareholders, which means that you will also get a little part of the profit because you are a shareholder of this company. This part of the profit is called the dividend. Let's say that the company announces a dividend of Rs. 500 for each share. So you got Rs 500 every year for 3 years. You will get this income every year until you are holding that share in your Demat account. 

Now, what is the Demat account? 

When you decide to trade in the share market, you firstly need to contact a share broker (this is a person who with the permission of SEBI helps you to enter, earn, and stay safe from the frauds of the share market). This share broker will open two accounts for you. 1. A Demat account. 2. A trading account. This trading account acts as your wallet to buy and sell shares, and the Demat account acts as a locker in which your shares and securities, that you have purchased, are kept.