Understanding Stocks and Shares
Equities refer to a stock of a company measured in number of shares.
- Very often, the terms, “equities”, “stocks”, “shares” and “securities” refer to the same thing.
- Buying stocks represents a share of ownership in the company and you become its shareholder.
- Shares are bought and sold on stock exchange(s) like the Bombay Stock Exchange (BSE).
Ways to Earn Returns
- Capital Growth
When the current stock price rises above its purchase price over a period of time.
- Example: If a stock was bought at INR 1.00 per share and sold at INR 1.15, the return from capital growth is 15% ((INR 1.15 - INR 1.00)/INR 1.00 x 100%).
When a company distributes a portion of profits to shareholders in cash or additional stocks.
- Example: A company pays dividends of 2 paisa per share. If you hold 100 shares, you will receive INR 2 (INR 0.02 x 100).
Benefits & Risks
Ease of trading
Stocks may be bought or sold on the stock exchange.
You own a part of the company when you buy its shares. This allows you to benefit from the company’s growth and profit.
Stock prices are reflected in real time on the stock exchange, allowing investors to buy and sell at their desired prices.
Stock prices may rise or fall depending the company’s performance and other factors affecting the market.
Stock prices may rise or fall sharply over the course of a day. The higher the volatility, the higher the risk. Constant monitoring of market movements and stock prices may be required in times of high volatility.
digibank offers Mutual Funds that are instant, paperless, signatureless – even transaction fee-less! What’s more? You get to choose from 250+ Mutual Funds across 15 top-performing asset management companies. So why wait? Login to digibank (app or internet banking) and start investing in a flash with instant Mutual Funds on digibank.
Read up more on Mutual Funds here
Mutual Fund investments are subject to market risks, read all scheme related documents carefully before investing.