Basics of Investing in Stock Market

Become the stock market wizard on your own

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Manuja Samant

2021-02-23 2 min read

Do you think of making money from the stock market but then drop the idea because it sounds complicated? Everyone likes fast money and there is no place other than the stock market to give you returns n times the other investment options. You reading this article shows that you have the risk appetite to churn money from trading in shares but don’t want to give your money in someone else’s hands. You want to make it big yourself and you are at the right place to begin. Following is the step by step guide for investing in the stock market:

1.       Opening a Demat  Account:

Gone are the days when shares of a company used to come in physical format, now it’s all digitalized in the digital era. Demat account is an account which will hold your shares in dematerialized format i.e. in electronic form. So opening a demat account is a must for investing in stock market. You can open the account with a traditional broker or a discount broker. In case of traditional brokers, the brokerage is a bit high as compared to discount brokers but here, you will be in constant touch with your relationship manager if you require any assistance or in case of any trouble. Discount brokers do not offer personal connection. That is the major drawback for those who need a personal touch when it comes to service delivery. Following are a few examples-

Traditional Brokers: Motilal Oswal, Religare Securities, Sherkhan, Angel Broking, Prabhudas Lilladhar, India Infoline, etc.

Discount Brokers:  Zerodha, Upstocks, etc.

 

2.       Things required for opening a Demat Account and beginning your stock market journey:

a.       Savings Account which will be linked to the Demat Account

b.      PAN Card

c.       Aadhar Card

d.      Internet Connectivity

e.      Mobile/ Laptop/ PC

Almost all of these things are already there with us so no need to stress here.

3.       Transferring Funds to your Demat Account:

Whenever you go to a fruits and vegetables vendor you carry your wallet. Same is to be done for buying shares of a company. The only difference is that the money will be in the demat account instead of your wallet. Yes, it is that easy! Can't believe me? Go try it and you will see yourself sailing through. The demat account you just opened will be linked to your bank account. You have to transfer money from the bank account to your broking application so that you are set to trade shares with all that cash! Depending on the speed of the broking app you use, the money is transferred within a few minutes to hours. Once the account is loaded with cash you are ready for the next step.

 

4.       Selecting the Right Share Script:

This is the most important step which will make or break your bank balance, so be careful my friend. There are so many options available here that there is a great chance you might get overwhelmed as to which one you should select. Relax, take a deep breath. There is no hurry. Watch the market move. Take your own time to plan your trade. It may be a few minutes, hours, days or probably weeks. Everyone has their own risk appetite and confidence level. Once you are surely convinced about the shares you want to invest in, make the move.