How to
invest in stock market for beginners India
How to start,
learn, and invest money in share/stock market in India for beginners
Share
Market Investment Guide for Beginners and students
A share market is a place where
shares are publicly issued and traded. A share serves as a tradeable document
that validates your ownership of a company. The share market is also where
buyers and sellers exchange these documents. To facilitate the exchange
publicly, a formal marketplace has been developed for investors to buy and sell
their shares.
Share
Market Investment for Beginners
To invest in stocks publicly listed on the market, you need to fulfil the following requirements:
1. Demat Account (How to open Demat Account)
A Demat account serves as an
electronic house for your shares. Opening a Demat account is a hassle-free
process conducted online or offline with the help of a depository participant.
Many banks also offer Demat account services to their investors.
A Demat account and trading account go hand in hand. A trading account is used to buy and sell securities that you wish to trade on the stock market. Both Demat and trading account are mandatory for investing in the share market.
The Bombay Stock Exchange and the National Stock Exchange are primary exchanges where stocks are listed. However, some stocks may only be available on either one of these two exchanges. Hence, it is advisable to open your trading account with a depository participant who offers trading on both BSE and NSE.
3. Linked Bank Account
Linking a bank account to your trading account ensures a
seamless flow of money in and out of your account as you trade. This is
mandated by most brokers with whom you will choose to open a Demat and trading
account.
Currently, you can find two-in-one accounts that serve as
both a Demat account and a trading account. Some brokers also offer a
three-in-one account where one can trade directly from their bank account and
store their securities in the same location.
The investment process differs
when choosing to invest in the primary share market as compared to the
secondary share market.
A primary share market investment
is made through an initial public offering (IPO). Once all applications for the
IPO are received and counted by the company in consideration, the shares are
allotted to investors based on demand and availability.
IPO application is made simple
through your net banking account via Application Supported by Blocked Amount
(ASBA). As an example of this process, if you have applied for shares that are
worth ₹1 lakh, this amount will be blocked into your bank account instead of
being sent directly to the company.
Once your shares are allotted, the exact amount is then
debited with the balance being released. All IPO applications have to
compulsorily follow this procedure. Once shares are allotted, they are listed
on the stock exchange, and you can begin trading them within one week.
The secondary share market is where stock buying and selling
action occurs between investors. Follow these steps to invest in the secondary
share market:
·
Complete your stock market transaction by paying
for and receiving the shares or transferring the shares and receiving the
money.
Nutshell
The process of investing in
stocks for beginners is quite simple. It’s crucial to be aware of your
investment horizon and financial goals before you start investing in the stock
market. Having advanced tools, expert recommendations and detailed real-time
stock analysis data at your disposal as a beginner in the stock market is a huge
factor towards risk minimisation. To avail of these benefits and more, open a
Demat and trading account with zerodha
*money purifier blogpost
*Terms and conditions apply. This is
an information communication not be considered as a suggestion for investment.
Investments in securities market are subject to market risks, read all the
related documents carefully before investing.
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