- Investing in the share market is a very lengthy process, but the same will fetch you huge returns.
- In the very initial phase, investing in the share market might look cumbersome because we have no knowledge about the same.
- A share market is a place where there is an ample exchange of financial instruments such as bonds, equities, stocks, and commodities.
- There are two primary stock markets in our country.
They are as follows:
- Basically, the NSE is 90% made up of cash traders.
- For more powerful trading in India, there are other exchanges such as the Indian Energy Exchange (IEX) or the Multi Commodity Exchange (MCX).
- All the activities of the share market are governed by the Securities and Exchange Board of India (SEBI).
- There are also other indexes in our country such as NIFTY and SENSEX.
- The NIFTY is a basket of top 50 stocks in terms of market capitalization that are listed on the NSE, whereas the SENSEX is an index that owns 30 stocks that are listed on the BSE only.
You are not allowed to directly invest in the share market.
You may require the services of a broker or other stock brokerage firms in order to trade from their platform.
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- You will have to follow the following process to invest in the share market:
Firstly, you will have to open a trading account with a stock broker or with any other stock brokerage firm.
- They will help you to trade or simply allow you to place buy and sell orders.
- The broker or the stock brokerage firm will then open a demat account for you, which will allow you to hold the investments in your own name. You will have to make sure that your demat account is linked to your bank account, which will allow you a free flow of money. To open a trading account, you will need to complete your KYC (Know Your Customer) document.
- This will include verification through government-authorised identity cards such as the Aadhar or PAN card.
- In recent times, all the brokers have an online KYC platform, which will suffice all the brokerage firms’ needs quickly.
This will also, in turn, open your account within a few minutes.
- After your demat account is opened, you can trade online, in person, or through your broker.
What are the ways through which you can invest in the share market?
There are several ways through which you can invest in the share market.
They are as follows:
Pros and Cons of Investing in the Share Market:
It is very essential for traders to know the pros and cons of trading as well as investing.
The main pros and cons of investing in the share market are as follows:
|Easy to buy||Takes a lot of research time|
|Liquidity||It competes with institutional and professional investors|
|Grows with economy||Risky like COVID fall|
|Stay ahead of inflation||Shareholders of all the falling companies are paid last|
|Income is generated from price appreciation and dividends||There are emotional ups and downs|
|Won’t require a lot of money to start investing||Taxes are applied on all the profitable stocks.|
What are the charges that you will have to bear while you are investing in the share market?
If you are investing in the share market, it won’t occur for free.
There are the following charges that will be applicable if you are investing in the share market:
These days you have several options when it comes to investing, so you can really match your investing style to your knowledge and how much time and energy you want to spend investing. You can spend as much or as little time as you want on investing.
Here’s your first big decision point: How will your money be managed?
- A human professional: This “do-it-for-me” option is a great choice for those who want to spend just a few minutes a year worrying about investing. It’s also a good choice for those with limited knowledge of investing.
- A robo-advisor: A robo-advisor is another solid “do-it-for-me” solution that has an automated program manage your money using the same decision process a human advisor might – but at much lower cost. You can set up an investment plan quickly and then all you’ll need to do is deposit money, and the robo-advisor does the rest.
- Self-managed: This “do-it-yourself” option is a great choice for those with greater knowledge or those who can devote time to making investing decisions. If you want to select your own stocks or funds, you’ll need a brokerage account.
We hope that the above blog has given you clarity about how to invest in the share market.
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