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When you buy a share of company’s stock, you become one of the many owners of the company. This is something most investors forget when they buy a stock. After buying a stock, you will have to share not just the profits but also the losses. When the company makes a profit, you will earn a share of that profit. And, when the company makes losses, you will lose money. It is this aspect that makes day equity stock trading risky.
When a share is issued by a company, it has a face value. Once the stock is traded, the value of the stock can either go up or come down. This value is called as the share price. A share price goes up when the demand is more and goes down when the demand decreases. As an investor, you should not get disheartened as share prices of good companies will always go up.
Many people make money by buying at a low price and selling at a higher price. In a bear market, the share prices go down and in a bull market, the share prices increase. Usually it is impossible to predict whether a share price will go up or down. Therefore, it is important to have a long-term view. Companies will increase their sales over a period of time and hence, they will make more profits and this will result in an increase in their share prices.
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