How to Start Investing in Stock Market?
How to Start Investing in Stock Market or Share Market: If we talk about investing in the stock market, the trend of people in India has increased a lot in the last 4 to 5 years, and there are some main reasons behind the trend of people in the stock market-
- An increasing number of users using internet banking, mobile banking
- Possible to buy and sell stocks in real-time by mobile
- Rising stock market index – Sensex above 35 thousand, and Nifty above 10 thousand
- Information related to the stock market to be available on mobile internet,
- Much higher return potential than other investment options (bank deposits, gold)
Now in such a situation, if you also want to start investing in the stock market investment, but you do not understand how to start investing in the stock market, then after reading this post completely, you can start your stock market investment.
In this post, we will know these 5 important things to start stock market investment –
- What are the documents you need to have for investing in the stock market?
- What type of account do you need to open for stock market investment?
- What is the minimum amount you will need for stock market investment?
- How to buy and sell stock in the stock market?
- How will you be able to make a profit by investing in the stock market?
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What are the documents you need to have for investing in the stock market?
To invest in the stock market, first of all, you must have a PAN CARD, the full form of a PAN CARD is a PERMANENT ACCOUNT NUMBER, and this 10-digit account number is an important document issued by the Indian Income Tax Department, and PAN number is necessary for any financial transaction in India.
And if your PAN card has not yet been made, then get it made, you can also send an application online on the website of NSDL to make it,
By the way, nowadays KYC is also done for bank accounts from time to time, FULL FORM of KYC is – Know your customer, and under KYC you are asked for UPDATED KYC DOCUMENTS of your Aadhaar card and other ADDRESS PROOF,
To pay for whatever stock or share you will buy, you will have to pay your broker, and your broker will transfer your money to the seller of the shares, and the shares you bought will be deposited in your Demat account,
You will compulsorily need an online internet banking account to make payments to your broker, through which you can make payments to your broker, the stockbroker opens an account for all your payment records, which is called a trading account. says,
To buy stock, first, you have to deposit money in this trading account, and on selling the shares, your broker will deposit the money in exchange for shares in this trading account…
What type of account do you need to open to investing in the stock market?
Select Stock Broker
You or I cannot buy or sell stocks directly from the stock exchange (BSE or NSE), our stock buy or sell order is executed by a stock broker till the stock exchange,
And so to buy stocks or shares, we need a stock broker to invest in the stock market, a stock broker is an agency that is authorized to buy and sell stocks on the stock exchange, such as Sherkhan, Angel Broking, ICICI Direct, and others
With the help of a stockbroker, we can buy and sell stocks or shares, and when we go to a stockbroker to start investing in the stock market, he opens two accounts for us-
Demat Account (Demat Account) – We compulsorily need a DEMAT ACCOUNT to keep the purchased shares with us, Shares or stocks bought in this account are deposited (credited) in electronic form and are debited from this account when sold.
Trading Account (Trading Account) – The work of buying and selling shares is done with the help of a trading account, In this account, we get a USER ID and PASSWORD, with the help of which we place an order to buy or sell a stock using the stock broker’s software or SYSTEM.
Keep in mind – The fee that the stock broker charges from you in exchange for its services is called a brokerage, whenever you choose a stock broker, you must compare the services provided by the stockbroker and its brokerage with other stock brokers in the market. , so that you get fewer fees and you get better service.
What is the minimum amount you will need for stock market investment?
There are many types of questions in the mind of a new investor who starts investing in the stock market, in which one of the main questions is-
What is the minimum amount of money he should have, and like the minimum balance in a bank account, does he need to deposit a minimum amount in the stock market as well?
So I assure you that there is no limit to investing in the stock market, nor any minimum amount of money, you can buy shares of Rs 100 to Rs 500, whatever amount you want, And any kind of minimum money is needed, there is no such limit,
Second, there is also a question in the mind of some people whether any minimum balance has to be kept in a DEMAT ACCOUNT or a TRADING ACCOUNT,
So here also I would like to assure you that – First of all, you should understand that only shares or stocks are deposited in DEMAT ACCOUNT, not money,
That’s why there is no question of keeping more or less money in a DEMAT ACCOUNT.
On the other hand, TRADING ACCOUNT, with the help of which you pay the shares bought to your broker, then you need as much money in your trading account as you want to buy shares,
And here also the stock broker does not talk about maintaining any kind of minimum account balance in the trading account.
How to buy and sell stock in the stock market?
There are many types of questions in the mind of a new investor who starts investing in the stock market.
How will we buy and sell the stock?
So let me tell you that today buying and selling stocks is as easy as sending SMS or WhatsApp messages from MOBILE,
When you open your DEMAT and TRADING account with any broker, your broker will give you the USER ID and PASSWORD of the TRADING ACCOUNT to buy and sell stocks.
You log in with that user ID and password in the stockbroker’s software, whether it is on a computer or mobile,
And with the help of a user ID and password, you place an order to buy and sell stock to your broker, and the broker sends your order to the stock exchange (BSE or NSE), And as soon as the order is executed by the stock exchange, you get a confirmation message that the order to buy that stock has been executed.
There are two types of trading in the stock market, intraday trading and delivery-based trading.
Intraday Trading – In this you do not actually buy the stock to keep it with you, rather you just want to make a profit by taking advantage of the fluctuations in the share price,
And that’s why on the same day you place an order to buy shares, they also sell them on the same day.
And in this way, if you want to do intraday trading then you have to log in to your trading account and choose the intraday option while placing an order to buy stock,
Now there is another type of trading –
Delivery Based Trading
When you want to keep the purchased shares with you for a few days, or for as long as you want, then the order for the purchase of such shares is called – Delivery Based Trading.
And for this, you have to log in to your trading account and choose the option of DELIVERY while placing the order to buy the stock,
Note – Stocks or shares bought in Delivery Based Trading, will be credited to your DEMAT ACCOUNT in the next two days (T+2 days) except the day you actually buy the shares happens…
And in this type of delivery-based trading, when the shares are actually credited to your Demat account, only then do you sell them, So when you start trading in the stock market, first think about what kind of trading you want to do – intraday or delivery trading.
How will you be able to make a profit by investing in the stock market?
There are many types of questions in the mind of a new investor who starts investing in the stock market, in which another major question is-
How will you make a profit by investing in the stock market –
So here I would like to tell you that – the company’s stock you buy, and the amount you buy, you are giving that much money to that company as capital, and you are investing in the business of that company. According to the quantity, the profit and loss earned by that company becomes a shareholder/partner / owner,
And just as a business owner gets two major benefits, you also get both major benefits by buying a stock or share, now what are these two benefits-
There are two main advantages to any business-
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The profit the company is making
And in the same way, when you buy stock or shares of a company, you get these two benefits –
Whatever profit the company earns, that profit is distributed equally among the shareholders who buy the shares of the company.
And when the shareholder gets the profit share from the company then it is called a DIVIDEND.
For example – you bought 100 shares of XYZ Company at Rs.100, and the company decided to pay a dividend of Rs.2 per share, then the profit you would get would be
100 shares X 2 Profit per share = Rs 200,
In this way, you can look at dividend income as a passive income, because you just buy the stock and keep it deposited in your account, you do not have to do anything else, and as the company earns profit, it gives you some of it. Deposits your share in your bank account, which is tax-free income,
Friends, I hope you must have got to learn something by reading this post investing in the stock market, and if you like this post, then do write your question and comment below.