Introduction
Here we will talk about How to start investing in stock market. For investing in stock market first of all you will need a demat account. Now you can easily open a demat account with a smartphone and start investing in stock market. There are two exchanges in India that is NSE (National Stock exchange) and BSE (Bombay Stock Exchange). Around 2000+ stocks are listed on NSE and 5000+ stocks are listed on BSE.
How to open a demat account-
For opening a demat account you will need a some documents like –
Aadhar Card
PAN Card
Bank Account
Bank Statement or ITR
If you have all this documents available then you can easily open a demat account in less than a 10 minutes from your smartphone. Always open your demat account with a broker which is SEBI registered.
Platforms for Demat account
There are so many platforms or you can say as applications are available and you can easily download from Play Store or IOS store.Some best applications which is SEBI registered are mentioned below –
Upstox
5paisa
Angelone
Zerodha Kite
Shoonya, etc
How to start investing in stock market
After opening a demat account you will get a login I’d and password. After login you can search a stocks which you have to buy or sell and you can make a investment in that. Investing in stock market can be done in various different styles like intraday, Short term or long term.
Intraday –
Actually Intraday trading is not considered in investing, it’s considered as Trading. Because you can buy or sell for a same day. Here you cannot take a delivery of shares for the short term or long term.
For example if you have buy or sells a shares in a morning then you have to closed the positions in the evening before market closed and if cannot exit the positions till evening before market is closing then broker will automatically closes your postions if you are in profit or loss, it doesn’t matters to a broker.
Short Term Investment –
Short Term Investing is like a shares you buy for some days or some months which is less than a year. The most profitable advantages of short term investments is you buy a shares for a specific events or on a basis of big news. There are some specific stocks or a specific sectors which gives a good returns on Budget day or election day and you can get a good returns after buying that specific stocks. If a big news comes in a specific stock then you can take a benefit from buying or selling that shares.
Long term Investment –
Definition of long term investment is that you buy a shares for a 1 year, 2 year, 5 years and more. Holding a shares for a years on years is known as long term Investment.
How to pick the best stocks
There are so many factors for picking the shares. On the basis of P/E ratio, P/B ratio, Debt on company, etc you can filter out and make a investment.
For better results always make a balanced portfolio, don’t invest in single stock while you can invest in several stocks. The companies are categorised into Large Cap funds, Mid-Cap funds, Small Cap funds, etc. So if you are deciding to make a strong portfolio, divide your funds in three parts and invest some amount in Large Cap, some amount in Mid-cap & some amount in Small Cap funds. And also don’t invest your amount in single sector, Always keep your portfolio diversified. There are so many sectors like Banking Sector, Energy sector, NBFCs, Electric Sector, Automobile Sector, FMCG sector, etc. For example cipla or sunpharma comes under pharmaceutical sector.
Benefits of Demat account
While you cannot only invest in stocks but you can also invest in mutual funds, ETFs, Index, IPO, etc If you want to invest in IPO that is Initial Public Offering, you will need a demat account.
On next post or blog we will be defined a IPO in details.