How to invest in stock market: Everything about Demat account, picking shares to investing apps
If you have been considering investing in the stock market, then here's your complete guide to the Share Bazaar. From making a Demat account to picking up good shares, doing value investing and trading through apps, know everything
In today’s day and age investing is crucial. Now, you would ask why? Well, investing preps you for future challenges, being financially independent is always a good option. While some invest to beat inflation, some investments are of creating new assets for earning money. Investing in the stock market is one of the most popular ways of utilizing the money to reach the set targets of yearly earrings. By investing in the stock market one can earn a minimum 50 percent profit to a maximum of 100 to 200 percent. There are different types of stock market investors- trend traders or long-time investors or value investors. Investing in SEBI-listed company shares comes with its own set of pros and cons. While many have lost their hard-earned money, many have also become billionaires making huge profits from the shares. Investing in the company share requires a great amount of research as well as knowledge about the company and uncertainties of the market. Here in this article, we take you through everything about investing in the stock market. From opening a Demat account to picking up correct shares and which applications to use for trading and much more.
Beginners guide on how to invest in the Indian Stock Market:
- Decide why you want to invest in stock market
- Learn all the basic terms about trading
- Research about the risks involved in trading
- Make an investing plan
- Know your goal for the investment
- Open an investing account i.e. Demat and trading account
- Decide an investing budget (you can start with a small amount)
- Sign up on trading websites/apps
- Start with baby steps- invest in your first stock
How to make a Demat Account?
All the stock market traders have Demat accounts, it is mandatory to create in order to keep the shareholdings and securities safe in government-regulated depositories. The Demat account provides a digitally secure and convenient way of storing the share certificates which eliminates the chances of theft, forgery, loss, damage of physical certificates. In case if your trade broker is not trustworthy, the Demat account helps you safeguard all your purchased shares. Trade brokers do not get access to login into your Demat account. The Demat accounts of all the traders are maintained by National Securities Depository Limited and Central Depository Services Limited and the banks act as intermediaries.
Steps to open Demat Account:
- Choose a trustworthy depository participant (trade broker/bank)
- Apply for signing up an account
- Submit all the documents needed
- Complete the KYC (Know Your Customer) Process
- Complete the verification
- Read all the agreement copies, terms & conditions
- Get your BO ID number
- Once the trade broker registers your details with Demat, you will receive an official email from NSDL
- NSDL will also give you the credentials of your Demat account
Documents needed to open Demat account:
- Proof Of Identity: Aadhar Card, PAN Card, Voter ID, etc
- Bank Account (Cancelled cheque)
- The registered sale or lease agreement of the house.
- Driving license with photograph
- Maintenance bill
- Insurance paper
- Utility or telephone bills
- Passport size photographs
Basic information about the Stock Market:
- Stock Market is a place where traders trade their shares(securities) issued by the company
- When the demand for company shares increases the price goes up and when the demand reduces the share price goes down
- The stock market is an organized market wherein NSDL is involved in the security of bonds and shareholdings
- One can invest in company shares or commodities such as grains, gold, oil, natural gas, etc
- Anyone with a working Demat account can trade in the stock market
What are leading stock brokers in India?
- Zerodha with 3,796,628
- Upstox with 2,369,796
- Angel Broking with 1,660,058
- ICICI Direct with 1,656,663
- HDFC securities with 963,691
How to pick good stocks?
- Choose trustworthy companies (with stable management and services)
- Research about the controversies related to the company owners
- Study financial leverages of the company
- Know about company innovations and future plans
- Know company earnings for recent years and growth
- Know companies earning ratio and yearly profits
- Know companies book ratio
- How many dividents company issues
- Study company services/ product value in the market
- Analyze what political environment affects the performance of the company
Frequently asked questions about the Indian stock market:
What is the minimum amount to invest in Stock Market?
One can start investing from Rs. 10 to Rs. 100. If starting with a small amount then you might end up buying penny stocks, which are in some cases are not reliable. Always research the company before investing.
What are the qualities of good stocks?
Increasing profits, low leverages on the company and its owners, good services/products, positive future plans and a great management committee.
How do experts choose stocks?
The expert from the share bazaar studies the performance of the companies for years before investing.
If you find the above information helpful, then do let us know. Meanwhile, for more such updates, stay hooked on to The Live Mirror.