Everyone wants to make money from the stock market, but this does not happen with everyone, in this you have to face a lot of losses, due to lack of knowledge and experience, if you also want to invest in the stock market then you are absolutely right. is in place, basically in this blog you will be told how you can invest in the stock market and what can be its benefits, what can be the loss etc. With which you will be able to take a right decision whether you should enter the stock market or not.
A market where shares are publicly issued and traded is known as share market. Share market and stock market are largely similar but the difference between the two is that only shares are traded through share market whereas stock market consists of various financial instruments like bonds, mutual funds, derivatives as well as some listed companies. Can trade shares of
There are following two types of share markets in India
- Primary Share Markets
- Secondary Share Markets
Primary Share Market is one such place. Where a company first registers with the goal of raising funds and issues a certain amount of shares
In the Primary Stock Exchange, any company is publicly listed with the goal of raising money. If a company sells its shares for the first time, it is called Initial Public Offering ie IPO.
Once new securities of a company are sold in the primary market, they are traded in the secondary market. In the secondary market, investors get opportunities to exit their investments and sell their shares.
A new investor in the secondary market buys shares from another investor at the market price prevailing at that time. Shares are bought either at the market price prevailing at that time or at such a price in which both the seller and the buyer are agreed.
Usually investors do this transaction with the help of a broker or any such intermediaries. that facilitate the process
The following are the advantages of investing in the share market –
- On investment made in share market, you get more return than bank FD, savings accounts
- When you buy a share of a company, you become a shareholder of that company. You also get a part of the profits of the company
- There is no lock-in period for investment made in the share market i.e. you can buy or sell your shares whenever you want.
- Share market is regulated by SEBI. Who takes care of your security and protects you from fraud
- In this you get a good return on your money. Which saves your money from inflation and keeps their value from decreasing
Following are the disadvantages of investing in the share market
- There are ups and downs in the stock market. Which has an effect on your investment and can also result in loss at times.
- If investment in share market is not done properly then it can be risky.
- There is no guarantee of getting fixed returns on your investment in the share market. You are likely to get more and sometimes less returns
How to Invest in Share Market
You cannot buy or sell shares directly in the share market. To do this, you have to either take the help of such brokers who are authorized to trade in the market. You can use brokerage companies that allow you to trade using their platform
This process takes place in the following steps.
To start investing, you need to open a trading account through a broker or stock brokerage platforms. A trading account is where you actually place trades or buy or sell orders.
Broker or stock brokerage platform opens a demat account for you. Who stores or holds your financial securities in your name
After this both your trading account and demat account are linked to your bank account. To open a Trading or Demat account, you have to provide KYC documents like – Aadhar card, PAN card etc.
Most brokers or brokerage platforms provide the facility of online KYC process in today’s time. Where you can submit your verifications details online sitting at home and open your account in no time
After both the accounts are opened, you can do trading through online or offline through your broker or brokerage platform.
Required Documents for Investing in Share Market
You need the following documents to invest in share market
1 – Your PAN Card
2 – Your Aadhar Card
3 – Your name on a canceled check of your active bank account
4 – Your residence proof
5 – Your income proof
6 – Your passport-size photograph
In Primary Share Market
Individuals who wish to invest in the primary share market can invest in it through IPO. To invest in this, a demat account, in which electronic copies of your shares are kept and a trading account is required to apply online.
Many times you can also apply through your bank account. Shares are allotted to applicants based on the market response to the IPO.
In Secondary Share Market
Secondary market is also commonly known as stock market. This is the market where the process of buying and selling of stocks among investors takes place.
The process of investing in this takes place in the following steps.
To invest in the secondary market, you need a demat and trading account. Which is linked with your bank account
After this you have to log in to your trading account. After that you choose which shares you want to buy or sell
To buy shares, you should have at least the amount of money in your account. If you want to sell shares then make sure that you have as many shares in your account as you want to sell
After that you can decide the price. On which you want to buy or sell shares. After that you have to wait for the buyer or seller to respond to the request made by you.
After this you complete your share market transaction by transferring money or shares. In return you will receive shares or money.