Thousands of users create their investment plans and invest in the stock market. But there are some people who want to learn about “How to Invest in Share Market”.
However, very few people have the basic knowledge before investing in the stock market.
People are usually excited about the stock market, because of which they want to invest in the stock market or because their friend or relative is trading.
But, here he forgets that no one in the stock market can make a profit in a single day. Before that, one has to learn about the stock market.
Therefore, today in this article, we will try to explain to our readers in detail in How to Invest in the Share Market.
Read also: Learn how to make money from share market
You may have heard many of your friends and relatives saying:
- “Trading in the stock market is very difficult”
- “People said Trading in the share market is like gambling”
- “Stock market is stupid, investors are the only losers here!”
EX : You don’t know how to drive a car, but if you do not try to drive yourself then how can you drive a car and how to get knowledge about driving cars is good or not.
Presumably, people with this type of thinking will not even have basic knowledge of the stock market.
You must keep in mind some essential stock market tips before investing in the stock market.
From their point of view, this is also true. A man has a habit of ignoring things that he considers difficult or relatively complex.
Also Read: 12 Best Stock Market Books
Obviously, you cannot understand how to buy or sell shares or how indices and exchanges work.
But, you must positively have basic knowledge of investment, in order that you’ll be able to become a stronger capitalist within the stock market!
For this, an investor has to read about How to Invest in the Share Market.
5 steps to invest in stock market in India
Let us now talk about the main topic of How to Invest in the Share Market without any delay. Here are the basic requirements to invest in the stock market.
1. PAN Card
First you need a Pan Card before starting investing.
This is a compulsory document before you begin with something associated with the stock exchange. To open a demat account, you need to have a PAN card in your name.
Apart from this, necessary documents are needed to open a demat account.
First of all, keep these necessary documents prepared then proceed to the method of gap a demat account.
Also, some younger users (especially students) always ask the question whether they are qualified to open a demat account? Because usually they do not have a PAN card.
The answer to this is clearly given in our review ‘Can a minor open a demat account’.
2. Find a Stockbroker
Once all the necessary documents have been verified, you need to find a suitable stockbroker for you.
Different users have different preferences and requirements from the broker. There are some things, keeping in mind that you have to choose the stock broker suitable for you.
There are a variety of stockbrokers in the market, including full-service stockbrokers, discount brokers, and bank-based stockbrokers. Each of them has its own strengths and drawbacks.
Following are some important factors that you need to consider while choosing a stockbroker:
- Brokerage shell
- Trading platform
- customer service
- Stock broker offline performance
- Trading Research and Tips
- Series of trading products
Research about a broker before choosing a stockbroker. Additionally, you can also use the Stockbroker Suggestion service. After that you can open a demat account for yourself.
3. Set Your Investment Goals and Objectives
For example, if I give you a boat and say, “Boat”. What will you say now?
Your answer will surely be where to take the boat .
This example means that you have to know about your destination before starting any journey.
It is important for a person to always know about his or her stated goal or purpose.
Similarly, before starting trading in the stock market you should know the following things:
- Investment objective
- Investment period
- risk appetite
- Investment Segment (Equity, Commodity, Currency, Mutual Funds)
Apart from the above aspects, you should keep in mind further priorities and considerations.
4. Purchase and sale in the stock market
Once you have chosen the items in line with you, after that you can start to invest in the share market.
There are several ways by which you can place your order in the stock market such as:
- Trading platform
- Mobile trading app
- Web based trading platform
- Terminal software
- Call and trade
- Visit a broker branch or franchise office
If you are trading on your own, you can use any trading platform (on mobile, laptop or desktop).
In this case, you should do the analysis at the fundamental or technical level (Learn how to Invest in the Share Market ) and then you can choose to place the order directly from the software.
However, even if you use the call and trade facility, see some analysis or understand the advice of a financial expert. Only then call your stockbroker’s service team.
To use this process, you do not have to understand the technology of any trading platform.
However, if the call is not received at the right time or the order is not delivered at the right time, you may lose your chances of making a potential profit.
First of all understand the aspects and then plan to trade in the stock market.
5. Learn from your trading mistakes
Being a new investor, you can make mistakes in your investment decisions.
However, people who invest in the share market admit their mistakes. Once you recognize that a selected strategy doesn’t work for a selected market state of affairs, this is often your initial lesson or knowledge.
Some of the common mistakes made while investing in the stock market are:
- Trading without market understanding
- Blindly trust others
- Not following stop loss and target price rules
- To be emotional
- No exit plan
Primary and Secondary Market
Before investing in the stock market, you should have a more basic knowledge that there are two types of stock market – one primary and second secondary.
When a company is listed on the stock market, they usually go through an IPO (Initial Public Offering) where shares are allocated to retail investors.
Stock market allows shares of listed companies to buy and sell in the secondary market. This market opens about 7 hours 5 days a week.
Before we understand more about investing in this stock market, before we take a look at what to do and not do in online stock trading:
Important things of stock trading:
- Read the POA (Power of Attorney) document thoroughly and sign it in specific places. Do not sign everywhere.
- Check the stockbroker’s background before choosing a stockbroker for yourself.
- Always get a contract note from your broker, as the broker does not provide these notes to you first.
- Understand all types of brokerage and tax related to trading with the stock broker of your choice. Otherwise, you may be cheated later. You can also use a brokerage calculator to understand the types of charges charged by a broker.
- If your broker is cheating, do not be afraid and contact the compliance officer of the broker. If that also does not help, then file your complaint with SEBI. You can also contact us if your broker is fraudulent.
- Check the registration number of brokers in various exchanges and their membership IDs on the respective websites of those exchanges.
- Many spam companies have recently started sending SMS in the name of major share brokers. New traders usually get cheated by such messages and they lose.
- Stock brokers provide research reports on a regular basis to their clients in the trading segment and then pass on to their clients. Before believing such research reports, analyze it.
- Monitor the shares that you have bought from the stock market. It is important to know when is the right time to keep, buy or exit and thus, it is important to monitor your portfolio.
Apart from this, you can learn from ‘Always make mistakes by the early trader in the stock market’ to avoid losses in the stock market at all times.
What are the different types of investment for beginners
I will suggest here best 10 types of investment, you can make money from there.
Before starting investing on this market, gain more knowledge about that particular investment that you want to invest.
- Mutual Funds
- Bank Products
- Growth investment
- Defensive investment
- Fixed Interest
- Index Funds
Usually, there is no way to invest in the stock market without the help of a stockbroker. To trade in the stock market, you first need to open a demat account!
However, if you want to invest in a few select companies, then you have the option to proceed with DSPP.
Let’s understand what DSPP is?
DSPP is called Direct Stock Purchase Plan. Where you contact the company through an agent (not a stockbroker) and request to buy the stock directly.
This cannot be seen as common stock market trading and is like trying to get a share in a business.
How to invest in the stock market for the long-term?
To invest in the stock market for the long-term, you need to do a detailed fundamental analysis of the shares (that is why learn how to invest in the share market).
This will help you understand the business proposal, its history and performance in the industry.
From this you can decide whether you can invest your money in the shares of this company for 5-10 years or more for a long time.
There are many fundamental analysis apps out there that you can use. However, your mobile trading app will also have enough information about it for various listed companies.
Do not invest for a long time in a stock that you are not sure about and in which you have not done any analysis.
There are many trading apps you can use to invest in the stock market. Most of these trading apps are provided by your stockbroker.
These apps have some features like:
- Market watch list
- Technical indicators
- Heat maps
- Market depth
- Stock fundamental
- Place order
Take a detailed demo of the mobile trading app before using it. This demo will help you understand how you can use the app and learn how to invest in the share market.
Read this: Best share market app to invest.
Let us discuss some of the frequently asked questions about how to invest in the stock market.
These questions are asked by all types of traders and their answers are generally not available in the public domain:
If you want to invest in the stock market, then a demat account is a must. If you are into intraday trading, only in that particular case, since you will not be distributing trades, you will not really need a demat account for this.
All transactions will then take place through your trading account and in that case no demat account will be required.
2. How to invest in the stock market without a PAN card?
A PAN card is 100% mandatory unless you want to invest in the stock market.
Only under age investors who do not have PAN cards, in such cases, they can open a demat account with the help of their parents or guardians.
Once they reach the age of 18, they can resume the process of opening a demat account and open a new demat account with their PAN card.
3. How to invest in the stock market without risk?
The stock market is known to provide higher returns than other forms of investment such as fixed deposits, bonds, etc. To get high returns, you have to take risk in the investment category.
4. How to invest in the stock market without knowledge?
If you want to invest in the stock market without knowledge, the best way is to get investment help from a specialist or go for portfolio management services.
For that you will have to pay more but you do not really need to get knowledge of stock market investment.
5. How to invest ₹ 1000 rupees in the stock market?
First of all, you need to know that yes, you can invest ₹ 1000 in the stock market.
Suppose you are investing in a stock FPP that is currently trading at a market value of ₹ 180. Thus, you can buy 5 shares of ₹ 900 worth of this company with your ₹ 1000 investment.
6. How much money do you need to invest in the stock market?
Some people start trades with less than ₹ 1000, while there are some who pursue and buy stocks of companies in the range of ₹ 50,000.
Rest, it depends on your budget and risk appetite.
7. How to invest in the stock market for the long term?
If you are looking to invest in the stock market for a long period, then you should first do a fundamental analysis of the stock.
In the form of this analysis, you can get to know the particular segments and stocks that are to your liking.
Once you do the analysis you need to make your decisions. If the market has not performed in the way you do not expect it, do not make any hasty calls.
If you need any help or concern regarding this article please comment below i will guide you to how to invest in the share market.
I hope you understand from this article how to invest in the share market, I can say it is easy or not too easy to make money from the market.
Buy, if you have knowledge about a particular company , what are they doing, management, loan amount, business strategy, portfolio etc.
So, you can easily earn money from the stock market.
Get one example from the 1992 scam movie. If you invest in cricket, you know about batsman, pitch, ground, bowler so definitely you can win.
Thank you and best of luck for your investment.