BASIC INFORMATION ABOUT STOCK MARKET!

 Basics of the Stock Market

  • Stocks (Shares): Represent ownership in a company. Buying a stock means you own a small part of that company.
  • Stock Exchanges: Stocks are traded on exchanges like the New York Stock Exchange (NYSE), Nasdaq, and Nepal Stock Exchange (NEPSE) in Nepal.
  • Indices: Groups of stocks that represent a market segment, e.g., S&P 500, Dow Jones, Nasdaq-100, or NEPSE Index in Nepal.

2. How People Make Money

  • Capital Gains: Buying stocks at a lower price and selling at a higher price.
  • Dividends: Some companies share their profits with stockholders through regular payments.
  • Long-Term Investing vs. Trading:
    • Investing: Holding stocks for years to benefit from company growth.
    • Trading: Buying and selling stocks quickly to take advantage of short-term price movements.

3. Risks in the Stock Market

  • Market Risk: Prices can go up and down due to economic conditions, news, or global events.
  • Company Risk: A company’s stock can fall if the business performs poorly.
  • Liquidity Risk: Some stocks may not have enough buyers or sellers, making trading difficult.

4. Stock Market in Nepal

  • NEPSE (Nepal Stock Exchange): Nepal’s only stock exchange, where companies like Nabil Bank, Nepal Telecom, and others are listed.
  • SEBON (Securities Board of Nepal): Regulates stock trading in Nepal.
  • Popular Investment Options in Nepal:
    • Ordinary Shares (Equities)
    • Mutual Funds
    • Debentures & Bonds

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