Are you interested in investing in the Colombo Stock Market?

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The step by step process.

An equity market, commonly known as a stock market is identified as a key financial instrument that facilitates wealth creation, economic development and economic equality. Initiatives taken by market stake holders and satisfactory economic indicators had a positive impact towards the performance of the Colombo Stock Exchange (CSE) .The All Share Price Index (ASPI) has recorded a growth of 17.4% while the S&P SL20 Index has grown by 16.9% in the current year.

Investor sentiments are geared at investing in the market when the market is growing. Hence the article will unfold the information required in entering the market, investing and managing ones portfolio.

What is a stock market?

A stock market is an organized place where securities (stocks, debt etc.) are bought and sold. One could enter the market through the Primary Market or the Secondary Market. The Primary Market is a market where new shares or debentures are issued for the first time. In this market the security is directly purchased from the issuer (company).The Secondary Market is a market in which an investor could either buy or sell securities from or to another investor, subsequent to the original issue in the Primary Market. This article will give out the guidelines required in entering both markets.

 How do you enter the Primary Market?

How do you buy and sell shares in the Secondary Market?

Few tips when investing…

  1. Don’t trade on excessive credit.
  2. Bear in mind that investing in the market bears a certain amount of risk. However the returns are usually greater compared to other financial instruments. If one makes informed decisions he could minimize the risk involved in investing. Learn about the market prior to investing.
  3. You should invest money that you do not require in the near future. Look in to long term investments rather than short term. 
Opportunities arising from the robust growth experienced in the market could be employed effectively to the economic process only if local and foreign investors continue to invest in the market. The guidelines given above will undoubtedly facilitate the said process.