Namasker, In this post we are going to discuss how to invest in share market.

Many people in India are willing to invest in stock market but do not know how invest in, and also have some fear about stock market. So we will try to clear all doubts about stock market.

So if you want to start investing in share market, you’ll love this guidance.

Necessary Tools To Invest Is Share Market

These are the basic tools necessary to invest in shares (for anybody).

What are these tools?

To buy shares in India, one must have a trading account linked to a bank account and a demat account.

Let’s know more about it:

Share Trading Account– A trading account is used to buy or sell shares in a stock market. Without a trading account, one cannot buy or sell stocks.
Demat Account– Trading account can not work lonely. Its need a demat account. After buying share through trading account you need to store the share safely. So the shares are kept in demat account. Similarly when shares are soled they are pulled out of demat account for sale.
Bank Account– You need a bank account to link with trading account. When you buy share amount will be debited and when sell amount will be credited to bank account.

For opening a demat account, the following documents are required:

PAN Card
Aadhar card (for address proof)
Canceled cheque/Bank Statement/Passbook
Passport size photos

Open Demat and Trading Account at Zerodha

HOW TO OPEN SHARE TRADING ACCOUNT?

Select a Brokerage Complay– Like Zerodha, Upstox, Axis Direct, HDFC Securities.
Fill The Form Of Account Opening– Fill all the basic details required, like- Name, Email ID, Phone No., Address etc. (Open Account Online at Zerodha)
Upload Documents– Upload all required documents, like- Pan, Addhar, Photo, Signature.

Upon verification, the login details are generally sent over email.

You can use these login details to enter the trading account and start buying and selling shares.

HOW TO OPEN DEMAT ACCOUNT?

The account opening procedure for demat and trading a/c is same. For beginners, it is better to open a share trading and demat account as a package. Open Demat and Trading account at Zerodha.

A demat account is a “dematerialised account” for shares.

“Dematerialised” means, electronic copy of share certificates. These days hard copies of share certificates are not issued.

HOW TO OPEN BANK ACCOUNT?

If you already have a bank account you can link it with your trading account.

Otherwise These days, bank accounts are easy to open.

If one has a Aadhar & PAN card, account opening can be done online -within minutes. Open a zero balance savings account and link it with trading account.

Open a zero balance savings account

On click the above link you will be redirect to Kotak bank portal. Where you can open a zero balance savings account with in 3 minutes. Just put the basic details and Aadhaar Number. Put the OTP and your account is ready to access.

Quick Tip: Go for the 3 in 1 account offered by Zerodha, Upstox, HDFC, Axis, etc.

The benefit of such account is that, with ONE application form you can open three a/c’s in one go.

So we are done with account opening process now learn- how to use trading account?

HOW TO USE TRADING ACCOUNT?

The basic question here is, how to buy and sell shares using trading account.

There are four basic things one has to do in a trading account to buy and sell shares:

Stock Name: Enter the name of stock you want to buy. You’ve to self-decide which stock to buy/sell. There are two stock exchanges: BSE and NSE. One can buy stock form any one of them. BSE has more stocks than NSE. By default go for NSE.
Trade Type: In any share trading platform, there are three types of trades possible: Cash, Intraday, and Margin. A beginner must go with the “cash” options. Intraday and Margin trading is for more professional traders.
Quantity: Here one must enter the quantity of shares to buy. How to decide it? Suppose a share “ABC” is Rs.100, and your budget is Rs.5,000. In this case you can buy only 50 nos shares. Remember: brokerage and other charges, taxes will be extra.
Price: Enter the price at which you want to buy your share. There are two options here: decide your own price, or buy it at a current market price. This step is most critical. Why? Because lower will be price of purchase, higher will be the profits.

3 basic advice before you start investing

When you are new to the stock market, you enter with lots of dreams and expectations. You might be planning to invest your savings and make lakhs in return.

Although there are hundreds of examples of people who had created huge wealth from the stock market, however, there are also thousands who didn’t.

Here are a few cautionary points for people who are just entering the world of investing.

— Pay down your ‘High-Interest’ debts first

If you have any kind of high-interest paying debts like personal loans, credit card dues debts, etc, then pay them first. The interests of these loans can be even as high as your returns from the market. There is no point in wasting your energy to give all the returns you made from the market as interests of your debts. Pay down these debts before entering the market.

— Invest only your additional/ surplus fund

Stop right there if you are planning to invest your next semester tuition fee, next month flat rent, savings for your daughter’s marriage which is going to happen next year or any similar reasons.

Only invest the amount that won’t affect your daily life. In addition, investing in debts/loans is really a bad idea, especially when you are new and learning how to invest in the share market.

— Keep some cash in hand

The cash in hand doesn’t just servers as your emergency fund. It also serves as your key to freedom. You can take big steps like changing your little flat, or quit your annoying job or simply shifting to a new city, only when you have cash in hand.

Do not get trapped by investing all your money and later losing your freedom. Do not sacrifice your personal freedom in the name of financial freedom.

Read some investing books.

There are a number of decent books on stock market investing that you can read to brush up the basics. Few good books that I will suggest the beginners should read are:

The Intelligent Investor by Benjamin Graham
One up on wall street by Peter Lynch
Common stocks and uncommon profits by Philip Fisher
The Dhandho Investor by Mohnish Pabrai
The little book that beats the market by Joel Greenblatt

Besides, there are a couple of more books that you can read to build good basics of the stock market. You can find the list of ten must-read books for Indian stock investors here.

More Details Coming Soon……