Types Of Investment Available In Stock Market


Investing in India offers wide range of opportunities. Over 5000 companies to choose from, there are a variety of options for an investor to choose from. There are frankly too many types of investment options are available to choose and it is advised that new investors stick with a few markets.

There are various types of investment available but main markets include Stocks (Equity), Bonds, Forex, Physical assets and Derivative markets. These markets can be further divided into more specialty markets.

Equity Market Investment.

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The market in which shares are issued and traded, either through exchanges or over-the-counter markets. Also known as the stock market, it is one of the most vital areas of a market economy because it gives companies access to capital and investors a slice of ownership in a company with the potential to realize gains based on its future performance.


Derivative Market Investment.

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A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.

Derivatives can either be traded over-the-counter (OTC) or on an exchange. OTC derivatives constitute the greater proportion of derivatives in existence and are unregulated, whereas derivatives traded on exchanges are standardized. OTC derivatives generally have greater risk for the counterparty than do standardized derivatives.


Commodities Market Investment.

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Commodities, whether they are related to food, energy or metals, are an important part of everyday life.  Anyone who drives a car can become significantly impacted by high crude oil prices. Anyone who eats might feel the impact of a drought on the soybean supply. Similarly, commodities can be an important way to diversify a portfolio beyond traditional securities – either for the long term, or as a place to park cash during unusually volatile or bearish stock markets. (Commodities traditionally move in opposition to stocks.)

Because there are many types of Investment available it used to be that the average investor did not invest in commodities because doing so required significant amounts of time, money and expertise. Today, though, there are a number of different routes to the commodity markets, and some of these routes make it easy for even non-professional traders to participate.


Forex Market Investment.

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The forex market is the market in which participants can buy, sell, exchange, and speculate on currencies. The forex market is made up of banks, commercial companies, central banks, investment management firms, hedge funds, and retail forex brokers and investors. The currency market is considered to be the largest financial market with over $5 trillion in daily transactions, which is more than the futures and equity markets combined.


 Mutual fund Investment.

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A mutual fund is an investment vehicle made up of a pool of moneys collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and other assets. Mutual funds are operated by professional money managers, who allocate the fund’s investments and attempt to produce capital gains and/or income for the fund’s investors. A mutual fund’s portfolio is structured and maintained to match the investment objectives stated in its prospectus.


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