Stock Market is always hot topic for businessman.

We always think to invest in stock market but we it is risk to invest in stock market. Yes, I agree but when their is risk their is growth. 

I researched a lot to invest and buy my first stock which was not performing good as it was my first time. I don't know much at that time.

Now, After spending my hours of understanding what we know before investing our hard money.

So, I am going to share you everything about share market you need to know as a beginner.


How to invest in Stock Market?

Investing in stock market is simply buying fractional ownership of a company.

Companies sell their fractional ownership in smaller units knows as Share, Stocks or Equity.

When company sell its very first unit know as IPO. IPO know as Initial Public Offering.

Any one can apply for these IPOs in India.

You can buy IPOs of the company. IPO market is also called as Primary market.

There are chance you will not get shares during IPOs.
But you can apply in secondary market where you can buy and sell shares. 
When you hear Nifty, Sensex, and Stock Price it is always about secondary market. Trading of shares and stocks happen in secondary market.


Terms Stock Exchange, Stock Broker, Depository and SEBI



Now you understand about IPOs and secondary market. Let us now understand who are the key participants in the Stock market:

Stock Exchange : NSE and BSE are famous stock exchanges in India. Company's get listed here either at IPO or after IPO their share and stocks for trading.

Stock Brokers : Stock Exchanges appoints Stock brokers. If you want to open trading or D-mat accounts, stock brokers will help you. 

Depository : NSDL and CDSL  are two depository in India. The way you deposit money in bank same you deposit shares in depository. When you open Demat account you get 16 digit DP id. This DP id is similar to your bank account number.

SEBI : SEBI is the regulatory board. They make rules for stock market in India. They also safe guard your interest. You can complain about your broker to SEBI.


DMAT Account Vs Trading Account


DMAT account is where you keep your shares. It gets opened with depository NSDL and CDSL. Your stock broker will help in opening one, you can have multiple DMAT accounts. It is identified as unique 16 digit DP id.

The trading account is the account you open with stock broker to buy and sell shares. Same as DMAT you can open multiple trading accounts with one or many stock brokers.

 


Find Correct Stock Broker In India


So, I can tell you bunch of applications where you can buy stocks or websites or some stock brokers to gain some hidden profits. No, but i will not do that here because i want you to understand how to find out :


  • Safety and Security : In financial services or banking business or anything related to money, safety and security is the first priority. So, find stockbroker who provide that in ethical and legal way.
  • Costing : Every time you buy or sell shares, stock brokers apply some brokerage fee. Make sure your broker is not charging lot of brokerage fee. Anything between 0.10% to 0.20% is fine these days. Generally brokers charges higher for first time investors, so talk to them to reduce and they will do that.
  • Trading Platform : Ease of doing things is also critical. Fund transfer, buy sell activity, different reports are few of the actions, you would be taking brokers electric platforms. It is important that you take a good demo of their platform or website.
  • Client Support : This is the main factor of any broker or company to provide support anytime required. So, you need to know how they will serve you support. 


Before investing with any broker have some research maybe 3-4 hours or 2-3 days. As, i took 7 days to know about all the stuff.

How Much I Need To Invest?

You are at starting stage.

Invest as much as you can like for start investing 10% - 20% if possible. Don't rush yourself so much that you end up in loosing money.

Understand how much money you can afford and invest that money.


When Is The Right Time To Invest?

There is always a right time. If you wait you end up loosing time.

Simple strategy invest every month and stick to it buy 5-10 units every month of stocks either it is Up, down or neutral. 

Because no one can tell you what will happen next.

Like today while i am writing this blog market crashed with 1000 Points. So, its not always same. But investment is great thing.


Where To Invest? 

What Companies You Should Choose?


There are two ways to find out companies simple and complicated, it all depend on yours perspective:


Simple Way:

If you want to invest in safe and moderate return, it can be simple to identify companies. Look for Nifty50 or Sensex30.

List out all the companies from Nifty50 and Sensex30. Choose any 5-6 companies from different sectors and start investing in those companies. There are chance you will get high returns.


Complicated Way:

When you invest in companies when they started to listed on stock exchange. At thus stage companies are trying to grow at faster pace. They grow very fast and chances of giving return is higher.

But in this case you need to invest lot of time to understand the market value of company, their product and growth level. You should have detailed research on these companies.

Some Important Points To Keep In Mind

  • Don't invest in unethical companies. If you don't find company good then don't invest either its growing rapidly.
  • Don't invest in loss making companies. It doesn't matter how discounted their share prices are looking now. If a company come down to 60 Rs from 200 Rs, it may go down as well to Rs 5.
  • Don't invest based on tips and insider information. 
  • Don't invest after watch news channel information first think about their growth and if you trust that company then invest.
  • Stay away from penny stocks. They may look fancy but they may go down to nothing.

Only invest in those companies which are helping in changing lives of people or companies have influence over people and companies contributing to the countries economy.

Make Rules right it down and when you find some company look at these factors, then start investing.

I want to recommend book for investors and this will help you more in investment The Intelligent Investor.