How do I invest in the stock market?
Making money is not as easy as it seems. There are many fine steps involved in it. But among the many questions arising, one of the major would be How do I invest in the stock market? But before that, you need to know why you should invest money. Let us read further and explore this together!
Why Should I invest?
Investing money can save you at many crucial moments. To achieve financial independence, investing matters a lot. It makes a huge difference. Smart investment choices make one financially sound. Unwise decisions can yield you experience. Investing paves the way for you to earn parallelly. This can help you get long-term returns. Even if inflation hits, you will be able to survive it.
Is it necessary to invest my money?
Yes and No. It is prudent to invest your money. But it is not a necessity. In the end, it all depends upon personal choices and decisions. Some reasons that support the idea of investing would be-
- Better Future
- Emergencies
- Learning the art of money management
- Financial discipline
Where to begin from?
Let us plan on — How to start investing in the stock market?
Demat account- To begin with, let us see a simple example. You wish to buy a product online. What would you need first? Yes, right. You would need a bank account to pay for what you purchase. Similar is the case with shares. To purchase shares, you need an account. And not some ordinary account. You will need something called a Demat account.
What is a DEMAT ACCOUNT?
(Dematerialisation account) is a kind of account to store the digital copies of the stocks. An investor gets an easy, electronic platform to buy and sell shares. It is for ease of access.
Is it free?
To your surprise, opening a Demat account is free. You might have to pay some annual maintenance charges. Also, it is highly dependent on the bank or brokers where you open it
Why do you need a Demat account?
It is difficult and risky to hold shares physically. There are chances that the share might get damaged. Also, there are chances that one has to perform tiresome paperwork for the same.
How does the Demat account work?
After opening a Demat account, one gets a unique Demat account number. Using a Demat account number, electronically one can deal with the shares. Through the Demat account, we can debit and credit the securities
Trading account
A trading account is an account with which one can buy and sell securities that he wishes to trade on the stock market. One cannot complete trading without having a Demat account and trading account. The Bombay Stock Exchange and the National Stock Exchange are the important exchanges where all the Good stocks are listed. Opening a trading account is one of the core steps to begin your trades.
Why do you need a trading account?
A trading account is something that is needed to purchase and sell shares in the stock markets. After possessing a Demat account, if you want to buy and sell shares then you will have to have a trading account.
IPO- Primary markets
Before you start investing, you need to know about the primary market. Begin with this. The initial public offering helps us to invest in the primary share market. It is very simple to apply for an IPO through the net banking account by a process which is called an ASBA.-Application supported by blocked amount. For example, if you have applied for an IPU worth a thousand rupees then this amount will be blocked in your account instead of being sent to the company. Once the shares are allotted the exact amount is debited and the balance is also released. All the IPOs follow this procedure.
Secondary markets
A secondary market is what is traditionally called a stock market. This is where all the action among the investors takes place. Buying and selling of shares take place in this market. To invest in this market one has to have a Demat account. It is through this Demat account that the trade takes place.
Requirement
- Might require some documents to invest in the stock market. these documents include your pan card your Aadhar card, your bank statement, your residential proof, passport size photographs, income certificate
- As mentioned above, a Demat account is mandatory to start investing in the stock market for beginners trading.
- After opening a Demat account the next thing you require is a trading account
Procedure
- They must open a Demat account that is linked to their banking account. The idea of linking your bank account with the Demat account is to help with the transactions. when you link it with your bank account when you buy a share the amount can be sent to the Demat account through your bank account. when you sell a share the amount that you receive can be transferred to your bank account via your Demat account.
- After successfully opening a Demat account they can log in to their account for further proceedings regarding the buying and selling of the shares.
- The final decision of choosing the shared line with the investor. by considering the performance in the market one can choose the share to be purchased.
- Before purchasing a share or selling a share, the investor can perform a simple analysis to yield maximum profit.
- First, you have to transfer the required amount for buying the share into your Demat account.
- Once this amount is deposited in your Demat account you can begin trading.
- In case of selling you can choose the share which you would like to sell if they have reached the level you wanted them to.
- After selling the share your account will be credited with the amount and in case of buying the shares, the amount will be debited from the same account.
- These are the simple steps required to start trading in the stock market. Due to the technology, it has become very easy to buy and sell shares.
Hopefully, these points would have helped you with- How do I invest in the stock market? Would you like to know more about Stock Market? There are many android/ios applications available that help you to trade stocks. Write your queries in the comment section below so that we can help you with more such content.

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