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Stock market and investors

Updated on 20 February 2021
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Bcom Exam Guide
20 min read 0 views
Updated on 20 February 2021

A Stock Market or Share Market is a mixture of buyers and sellers. These buyers and sellers represent their business and sell their stocks. They invest in shares of companies. This investment is either done through online trading platforms or stock brokers. One needs to be fully aware and informed before investing in something. Therefore, strategising and planning is required before investment. According to an online survey, there are 60 stock exchanges in and around the world. The largest stock markets are in the United States (54.5%) followed by Japan (7%) and then the United Kingdom (5%). Consumers of these stock markets include Public Traded Corporation, Retail Investors and Institutional Investors (insurance companies providing funds like mutual funds, index funds etc).  


Consumer Perception towards Stock Market


People come across various services and goods that appeal to them. Thus customers of the stock market invest in the things that they find is profit yielding. Almost everyone invests in stock exchange. Investing basically means putting in your money so that it works for you and yield profits. People invest in various kinds of funds and stock market. There are two kinds of stock market in India i.e. the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). People invest in these two stock markets. Consumer perception towards the stock market includes knowing about all the things like investing in funds, profits and losses, the stock markets around the world and SEBI. The Securities and Exchange Board of India (SEBI) is the regulator of these markets in India. The main aim of this agency is to promote a sense of development among its consumers and regulate these markets. 



Now there are various types of investors of stock exchange. These are:


Speculators 


These are the risk-taking investors who invest in trading. Sometimes the risk is more than the profit earned. So the balance is sometimes disrupted i.e. there is more loss than profit. But having expertise in trading, these speculators make up to their losses pretty soon.


Arbitrageurs


These are the buyers and the seller who trade the same commodities in different markets. They are the traders who purchase these things at different prices and sell them in various markets at other prices.


Hedgers


They are the commercial producers who make up to their profits and losses by selling the things that might lose its worth in future. For instance, if the copper prices are going to decrease, they sell their copper products to cover for the losses that might affect their profit margin in future. 


How do Investors perceive Stock Market?


The Investors perceive the stock market as a place where they can invest a particular amount and gain more than the invested amount. Sometimes the investment is made to keep the money safe or use it for some important purpose or work. For these investors, the stock exchange is that one market where they can put their money into something useful like funds and then enjoy the profits and the benefits in the future. The above-mentioned list is of the kinds of investors that invest in the stock market. 


A study on the perception of people about the stock market reveals that only 2% of people in India invest in stock markets i.e. 2.78 crore Indians. However, this is a very low number but now investing in these stock markets is becoming a trend and more people are investing their money in these markets. In comparison to the United States, 50% of the population has already invested in the share market and almost all the people possess shares. Sometimes investing in share markets and buying shares result in development of the economy and GDP of the country. 


Some of the facts regarding stock market are given below:


  1. By 2018, the total market capitalization was down by 14% as compared in 2017.
  2. There are a total of 16 stock exchanges with a total capitalization of $1 trillion.
  3. About 50% of the people have invested in the share market in the US and over 10% of the population hold international equity shares.
  4. The US represents over 40% of the total global market capitalization.
  5. There is 19% of the market share in the technology sector in the US. 
  6. Share purchases have risen in 2019 by 22%.


The above-mentioned points lay emphasis on the fact that investors who invest in these stock markets try to purchase and sell to yield profits. These investors are nothing but traders who put their money in these share markets to enjoy the future benefits. But stock markets cannot always be flourishing. There are certain phases where traders incur losses and the profit margin is less. According to an online survey, the stock market performs the worst in September. Due to such reasons people are still confused whether to invest in these markets or not. Therefore, before investing people must know about the consumer perception towards stock market and investors opinions and perceptions too.  


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