05 Feb How to Invest Money in Share Market
Share market is the right platform to earn money. For this, get proper knowledge of the rules, factors and important terms of the stock market. So far, share market is the right place to earn money for those who know stocks. The right time, approach and decision making power also plays an important role. For people who are new to the market, here is a step-wise detail on “how to invest in share market”. The lure to make money by investing is not new among the people. From past, people are trying to learn new ways of making money.
The share market is now the best place to grow your money. However, the risk involved is also high if there is no proper knowledge. If you are new, make sure that there is no sure-shot formula for success. On the other hand, interested people should know the frequently used terms. This includes stock market, stock exchange, shares, pan card, broker, demat and trading account.
Here is a detail of the entire procedure that a new investor has to follow.
Get a Pan card or Aadhar card: Pan or Aadhar card is mandatory for investing in the share market. This is a primary requirement to handle any financial transaction. The procedure to start investing in share market it easy when you have a pan card. The SEBI need to know the customers and this is done by pan card. For the account opening, it is mandated to facilitate 6 month bank statement and cancelled check.
Get a broker: Broker is very important to gather complete knowledge of the share market. He is an expert who guides, support and educates investor of what is happening in the market. He helps in trading, taking investment decision, picking shares, equity and other elements. Brokers are the authorized people who can deal with the shares in the market. Brokers are individuals, companies and even online firms who hold a license by SEBI. Brokers are reliable persons who are very helpful when you want to learn about the share market.
Open a Demat and Trading account: After picking a broker, the next step is to open a demat and trading account. The Demat account holds the stocks for the clients and reflect it in the stock portfolio. Share cannot be stored or hold physically and needs to be in the demat state. This demat account stores the shares that you buy and can easily sell when required. Be clear that, you do not get a physical certificate of the shares that you have in your demat account. They only reflect only in the Demat account statement.
Learn about buying and selling: Learning how to buy and sell the shares is an important factor. For this, you need to inform the broker about the share, price and quantity you wish to buy. Once the share reaches the stated price, the shares will be purchased. The broker also set the selling price as per your instruction. Trading is also of two types that decide the buying and selling of the shares. The trading of shares takes place in two exchanges, i.e. NSE and BSE. The broker will definitely guide you on this and will help to understand other terms clearly.
Here are few ways to invest in share market
- Understand the investment requirement and plan accordingly
- Be clear about your goal of investment and plan the strategies accordingly. Analyse the shares that fall in your set expectation list.
- Gather knowledge on when to enter the market. This will help you to buy the shares at the lowest price. This condition is generally when the market is weak. These shares definitely provide the high return.
- Always stay in contact with the broker to clear things. Ask broker to cross-check and then you take the final decision.
- Regularly monitor your share portfolio. It is advised, never to keep all the eggs in one basket. Thus, have diversity in your portfolio to minimize the risk and maximize the profit.
Be aware of the depository participant: In Indian stock market, NSDL and CDSL are the two depositories. These depositories provide the demat account and can be contacted easily. Thus, make the right decision when you are ready to try investing your savings into the share market.
Point to remember: Once you started trading in share market, make sure you invest carefully. The share market is tricky and it is easy that people get carried away and do various mistakes. Always take the help of a broker to clear any doubt and understand the market clearly. What makes you successful in share market? This is a common question. You need to know what is share market and know how to judge the ups and downs of the shares.