The stock markets present wonderful opportunities to invest money for the long term. In fact, the stock market holds the potential of multiplying returns and creating wealth for you. In the recent past, even the performance of newly listed companies has been outstanding. Some of the companies have even doubled from their IPO price. This makes stock markets even more attractive.
Investing in the share market is never too late. You can start investing at any age and right now is the best time to invest. However, you must ensure that you are not misguided while purchasing stocks. Investment in the share market is an art and you will learn it with time. To help beginners with how to invest in share market, we list down some of the points to enable them to make an investment in the stock market without any hassle.
Get a PAN Card
The first and foremost thing to do for investing in the Indian stock market is getting a PAN card for yourself. You can get a PAN card easily by visiting the NSDL website and registering yourself. Dispatch the basic documents like address proof, identity proof and two passport size photographs to the income tax office. When the PAN card application process is complete, it is delivered to your residential address.
Select the Broker
After you receive your PAN card, you must select the broker with whom you want to open the demat account. The broker or depository participant shall act as an intermediary between you and the stock exchange. You can purchase or sell securities in the stock market through the broker. Make sure that the broker you select fulfils your requirements.
Check the brokerage fees and overall quality of services provided by them. You can take the feedback from the people who hold an account with the broker or you can search about the reputation of the broker on the internet.
There are two types of brokers in the market; full-service and discount stockbroker. A full-service stockbroker apart from providing buying and selling of shares or securities provides range of services like research reports and advisory services. On the other hand, discount brokers are also called budget brokers because they charge a flat fee on shares and commodity trading.
Open a Demat Account
The next step after selecting the right broker is to open a demat account. Demat account is the primary requirement for trading and investing in the Indian financial markets. To open a demat account, you must provide your contact details to the SEBI registered stockbroker along with the necessary documents. The documents required for opening a demat account are as follows;
- Address proof
- Identity proof
- PAN card
- Bank statement or passbook
- Recent passport size photograph
- Cancelled cheque
Once you submit the documents to your stockbroker, your demat account will be opened in 2-3 business days. Once your demat account is opened, you can trade or invest in the stock market by transferring money from the bank account to your demat account.
Study and Research the Stock Market
After opening the demat account, you must start researching and studying the stock market. Visit different websites, study various company’s profiles, read trading journals, understand the aspects of various industries, etc. This research will help you in investing in companies that are fundamentally sound and financially strong. You must keep researching different companies because there may be hidden gems that can create huge wealth for you in the future.
Follow the Stock Market
After you select the companies for investment, you must follow the market regularly. You can select 10-20 good companies and monitor their price movements regularly to invest when an opportunity arises. You can track the stock market on stock market mobile applications, TV, newspapers, etc. You must always remain updated about any news or information related to the industry in which you have invested.
Keep a Check on Emotions
Emotions have no place in the stock market and you must always keep a check on them. On some days you will feel good about the markets while on some days you might get nervous or anxious. Make sure that your emotions do not make you change your investment strategy.
The stock market is an investment avenue where high returns can be made in the long term. Following an investment strategy and remaining invested in all phases of the market is the key to success. The beginners in the market can start by taking small steps in the form of small investments. With time, your ability to read, understand and analyse the market will improve. However, if you seek the help of an expert to make the investment in the stock market, you can get in touch with the most reputed broking firm in India, Kotak Securities.