• Home
  • Personal Finance and Investment
  • Securities Market Investment
  • Content

Let’s Learn How to Invest in Securities Market

In securities market, securities such as Shares, Bonds, Mutual Funds, Exchange Traded Fund (ETF), Derivatives Contracts (Futures and Option contracts) etc. are traded. These securities have different features and risk characteristics. Investor should understand these features and risk characteristics before investing in these different types of securities

Major Types of Securities:

Types of Securities What It Is / Benefits Risk
Shares
  • Shares are issued by companies to raise funds from investors, for business activity.
  • When investor buys shares of a company, they become part-owners of that company, thereby gets an opportunity to participate in the company’s growth and financial success.
  • Benefits:
  • Investor gets income from dividends
  • Capital gains if the share price rises.
  • Price of shares can go up or down depending the performance of the company and also depends upon economic conditions.
  • Value of share can fluctuate
Bonds
  • Companies or governments can borrow money from investors by issuing bonds to raise funds.
  • Benefits:
  • Regular stream of interest (the 'coupon').
  • Invested amount returned on completion of bond tenure.
  • Price fluctuations
  • Issuer defaults
  • Issuer is wound up
Mutual Funds
  • An investment vehicle where money from investors is pooled and invested by a fund manager
  • Investment made in a portfolio of assets such as stocks, bonds, or other securities.
  • Benefits:
  • Diversification of portfolio
  • Fund managed by professional fund manager

To know more about mutual funds, please watch the following videos:

(i) What is a Mutual Fund?


(ii) When should I start investing in Mutual Funds?


(iii) What are the various types of funds?
  • Price fluctuations
Exchange Traded Fund(ETF)
  • ETFs are similar to mutual funds but trade on stock exchanges like individual stocks.
  • ETF provide diversification and liquidity and are often more cost-effective than traditional mutual funds.
  • Price fluctuations

To Know More on How to Invest in Securities Market, please read booklet and PPTs

https:// investor.sebi.gov.in/ iematerial.html

  • Booklet on Securities Market: Securities Market– Understanding from Investor’s Perspective
  • PPT on How to invest in Initial Public Offer?
  • PPT on How to invest in Rights Issue?
  • PPT on How to Buy and Sell shares in Stock Market
  • PPT on Introduction to Mutual Funds
  • PPT on Exchange Traded Funds (ETFs)
  • PPT on Real Estate Investment Trusts (REITs)
  • PPT on Infrastructure Investment Trusts (InvITs)