What Is Share Market ? And What Is The History & Purpose Of Shares ?

 

WHAT IS SHARE MARKET ?

Stock market, share market or equity market- all three mean the same These are markets where you can buy or sell a company's shares Buying shares of a company means buying some percentage of ownership of that company That is, you become the holder of a percentage of that company If that company makes a profit, some percentage of that profit would also be given to you If that company incurs a loss, a percentage of that loss would also be borne by you .


HISTORY & PURPOSE OF SHARES -

The origin of share markets dates to around 400 years ago Around the 1600s, there was a Dutch East India company, like the British East India company, There was a similar company in the country of Netherlands today, known as Dutch East India company In those times, people used to indulge in a lot of exploration using ships The entire world map had not yet been discovered So the companies used to send their ships to discover new lands and trade with far away places The journey used to be of over thousands of kilo meters aboard a ship There was a huge amount of money required for this Not one person possessed such amounts of money individually in those times So, they publicly invited people to invest money in their ships When these ships would travel long distances to go to other lands and come back with treasures from there They were promised a share of these treasures/money eventually But this was a very risky affair Because during those times, more than half of the ships failed to come back They got lost, or broke down or got looted. Anything could happen to them So investors realized the risky nature of this enterprise So, instead of investing in a single ship, they preferred to invest in 5-6 of them So that at least one of them had chances of coming back One ship used to approach multiple investors for money So, this created somewhat of a share market There were open biddings of the ships on their docks Docks are the places where the ships come out from Gradually, this system became successful because the money crunch faced by the companies was supplemented by the common people. And the common people got a chance to earn more money Today, each country has its own stock exchange and every country has become greatly dependent upon the stock market .

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