Welcome to Learn Vern
As we had studied in the previous lecture.
I had discussed some basic information about the stock market.
I am here to discuss, What is the stock market?
We have already understood some details about the stock market.
So, today we will study about certain important terminologies which you might have not heard or find new or different.
So, I will give some basic information about them in a simplified way.
So, we have 4 terminologies that we have
In them first is, what is an investor?
What is a trader?
What is stock or equity and then What is an asset?
So, first we will talk about an Investor.
You can simply understand by,
It's a person who wants to make investment, supposedly,
He wants to buy a car, or a house, or any shares or bonds, any big property that he wants to buy, but for any of these things he is ready to pay the full amount, it's not that he has borrowed the money for it, he has the money kept with him, he wants to buy, he wants to do the full investment, he wants to give the full amount, so he will give the full amount and not keep anything in debt.
So, this is an investor.
Now, investors can be of different types and at different places, like you must have heard about angel investors, or anchor investors, or share market investors, or a property investor.
What is a property investor?
If I tell you, it is such a person who deals with the property.. understand like this!,
For instance, you told me Yash Sir, see this is a nice land in our area, if you want to invest, then you can do it there.
So, i told him, I already have an interest in property investment so you recommend me, so i invested in that property by giving the full amount and bought it.
Then, some other person came to me and showed me another property, that this property is also good, here you can do the investment, so this is the property investor who is ready to pay the full amount and buy that property.
Similarly, there is a same case with house, and car
Then there is another person who is interested in cars and wants to invest in cars, and also wants to open a tours and travel business somewhere or a taxi service or anything else. So he will invest in different types of cars.
Then, comes machinery. Now who will invest in this?Somebody who is a big industrialist or has his own company or manufacturing company, will think this machinery is nice. I should buy this, as it will be helpful for me in future and it can be of important need for me. How?
It can easy the work of my labours or the staffs,
So, our system will become even more smooth if we bring this machinery or any other software,
How will the software help?
Assume that there is a photographer who can get the help in editing any photos, videos so he will also have these usage, through that software so he will become the investor of the software,
Investors of share meaning, partnership investors, here bonds will also come, partnership investors in shares meaning,
suppose we had a company having you and me together, now a third person wants to invest in our company,so he will not give it like this only, he will give us some money, and we will in turn give him some partnership, so this is how share investment works.
Similar is the case with bond investors, where you give money for a certain period, and thereafter he is supposed to give return interest and after that give your money back entirely.
So, this also is a type of investors.
Next, is Trader, who is a person who works on Margin inside the stock market, this basically means he takes up leverage. I have already told you about brokers,there are different types of brokers, from them he will take leverage.
How does he do that?
Supposingly, I have one lakh rupees and I want to buy some shares from a certain company, but I can get only some shares of the company in this, but if I get a margin or a leverage of 10 lakh, that means I had 1 lakh rupees with me , but the other 9 lakh the company has lended to me, so those shares that I was unable to buy in 1 lakh, now I can buy that for 10 lakh rupees, meaning my profit scenario will increase even more,
But, in the same way here the caution is that the loss can also be that large in front of him.
So, a trader is somebody who works on borrowing.
Now, let's take a real life example to understand it better, suppose there is a person selling clothes, so if you look at businesses in general, there are a lot of roller overs that happens, as nobody pays then and there while buying, "they will be like , give us the product first, we will pay you soon"!
So they take the help of roll over, and work on borrowing only, so there is roll over from here, then there, it keeps going like this normally.
So this is How the Trader also works.
Next, is stock, I have already explained you as to What is a stock, that is a process that comes after IPO, where a partnership is built between the company and the stock owners, "that I have become a rightful partner of the company," because of this even I, will be informed when the company is releasing dividends, or the company wants to d list, or sell somewhere, so as I am the rightful partner, I will also be informed. Why?
Because I have also invested money, and have even though, a small part but have a take on this.
So, this is stocks,
Next, comes Assets, it is an alternative option where you can do investment, stock Market is already there, but along with that there are some other places to invest also, and I have already explained those options, like fixed deposit, debt securities, real estate, now these are some basic things here, but I will tell you something new also here, that you can do the investment but to cover the expenses, there should be some other options also.
It is very important because no one knows what will happen in the future.
So, you should consider insurance as an investment place only.
Even if you get the returns or no, still.
Second is Medical Insurance, don't you know that nobody knows what can happen Tomorrow, so medical insurance is very important.
Along with the Stock market, Fixed Deposit, understand the importance of these Alternative investment of Assets also, but apart from this understand also about the importance of Insurance or medical Insurance as this is also a part of our life.
So, I hope you are clear with Terminologies that I tried to explain to you all.
So, we will meet in the next video.
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