How To Invest In Share Market
Due to this increasing importance of the term investments in the present day, it can be seen that more and more people are becoming inclined towards the investment options as well as opportunities.
It is very difficult for common men to began any investment in Share market. The terminologies and the technical terms are unknown to common men.
We are very defensive and fearful in necessary stock calculations.
Share market is very risky but it is very exciting to explore this vas jungle. Investment start-up in the share market must be happening with caution.
Nagging questions come to mind from the very beginning. How much to invest? Where to invest? Which stocks are good? etc.
One can also buy all shares outstanding of a company costing maybe $100 million. Of course, there is regulation when stocks buying is in large numbers.
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How To Invest In Share Market
Before investing in stocks, one must have a trading account. Selection of an online broker can happen easily these days.
One element of distinction between brokers is their brokerage fees. Brokerage will charge with each trading we make using their trading account.
Anyone can also open a free trading account without any cost. Banks would like you to open a trading account free and then earn brokerage free for every transaction.
The brokerage fees are a very important factor in the selection of a stockbroker.
For every buy-sell order placed by the investors, one needs to pay a specific brokerage fee to the broker.
The level of brokerage fees varies from broker to broker. Whether one is a small trader or trade in big volumes, brokerage fees can make a good difference to net profit.
How To Make Investment In Stock Market
Everybody wants to make money and become rich quickly, and we Indians are no exception to this rule. It is this single-minded obsession that drives lakhs of people across the country to invest in the share market every year.
But, what if I tell you that there is an easy and simple way to identify some great stocks!
You can lose a big amount when stock prices fluctuate without any warning.
If you’re a careful investor who follows all the instructions in the stock market, then it is one of the best ways to make quick money.
- Screening and Filtering the right stocks using Financials
- Select only the companies that you understand
- Look for companies with sustainable Moat (competitive advantage)
- Find Low Debt Levels Companies
- Use financial ratios RoE and RoCE to identify the right stocks
- Honest, Transparent, and Competent Management
- Find the Right Price to Buy the Stock
Things You Will Need to Invest in the Stock Market
Before you start investing in the stock market, here’s a complete list of the buys for stock market investments you will need to get started.
1. PAN Card
In fact, it is very important to have a Permanent Account Number for engaging in any buying and selling of shares on the stock market.
The Pan card has a 10-digit alpha-numeric number which is given to every citizen of India to fulfil their tax liabilities by the Tax department.
2. Find a Broker
This is the next step. Share Trading can only be done in reality through an authorized agent or broker.
Brokers can be individuals or companies – but in both cases, they have to be registered & licensed by the SEBI.
3. Open a Demat/Trading Account
In fact, one thing is that you will never receive any physical document for any of the stocks you buy.
There are many popular banks and financial institutions who provide the Demat account services for free or a small fee/commission – so go ahead and take your pick.
Before investing in the share market, Demat account is required the most.
4. Choose a depository
Firstly you have to choose a depository for trading in share market and this will hold and release the shares on the share market which you buy and wish to sell shares respectively.
In fact, you get to choose between two depositories namely the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL).
5. Get a UIN number
A Unique Identification Number (UIN) will always require if you wish to engage in significant transactions involving amounts in excess of INR 1,00,000 (per transaction). However, this number is not needed for regular usually.