Monday, November 08, 2021

Comprehensive Guide To Financial Markets

It isn't uncommon for individuals to seek out the financial markets in a bid to invest any spare money they might have on hand. People invest their money in the hopes of securing returns on the principal amount. They may do so with an aim to generate a certain figure such that they can fulfil a specified goal during the course of their life that requires those funds. Moreover, investments allow for individuals to have an asset on hand which can serve as a provision during uncertain periods of time in the future.



Factors to Consider when Navigating Financial Markets

The sooner an individual invests, the greater the time frame they have for their investments to generate returns. Regularity and long-term investing are equally important.

Prior to investing in an asset, it is paramount to be aware of your own capacity for risk and the risks associated with the asset that appeals to you. Equally important is an understanding of the legitimacy of the asset and the cost and benefits associated with it. Comparisons must be drawn with other assets akin to it that are available in the market and whether it is in line with investments that have been made by you in the past. Determining the interest charged on your investment is key.

Financial investment opportunities in the market range from fixed deposits and small saving instruments to insurance/ pension / provident funds and securities that serve as market associated instruments in the form of shares and bonds among others.

Short-term financial investment opportunities range from a savings account in a bank to money market or liquid funds and fixed deposits at banks.

On the flip side, long-term financial investment opportunities available include mutual funds, bonds and debentures, public provident fund, company fixed deposits and post office savings schemes.

The stock exchange is responsible for assisting with providing assistance, regulation and control over the sale, purchase and holding of securities. In India, the National Stock Exchange and the Bombay Stock Exchange reign supreme.

The securities markets allow for buyers and sellers holding or interested in securities can conduct transactions where they sell and buy shares, bonds and debentures apart from other holdings. Corporates and entrepreneurs are provided with a place to garner capital for their companies and business ventures via public issuance.

Securities that an individual might invest in include shares, derivative products, government securities and units of mutual funds among others.

The primary market allows for the sale of new securities. It creates a space for issuers of securities which may range from the Government to corporates. These securities may be issued at their face value or with a premium or discount attached to them.

On the other end of the spectrum is the secondary market which allows for the trade of securities following their being offered to the public within the primary market and / or having been listed on a stock exchange. A large portion of trade is carried out via the secondary market which is made up of equity markets and debt markets.

Although this write-up provides you with only a glimpse into the world of financial markets, a more thorough understanding of the same is possible on the Angel One website. Here, you can learn about the markets regardless of whether you are a beginner or an expert. To add to the website's appeal is the fact that you can create your own Demat account, acquire insight into market updates that are concise yet thorough (Smart Buzz), and can have handpicked stock recommendations (ARQ Prime). Those who would like to set up their own trading platforms and take advantage of algorithmic trading can use SmartAPI. Simply put, the offerings are endless. 

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