Wondering how you can invest in the stock market? If then I am here to help you out. Whenever we think of investing our money, the stock market is the first suggestion that we get. But the thing is that not all of us are very aware of the whole process.
So in case if you are too interested in investing in the stock market, but don’t know where to start. Then you better stick with this page. As I am going to talk about how can you invest in the stock market.
So let’s just head into the topic without wasting much of the time:
How Does the Stock Market Work?
First of all let’s just understand how does stock market work, well in simple words a stock stands for a unit of holding rights in a company.
Whenever a company decides to go to the share market, the company has to split up their shares into a number of shares. And the processor of a share owns a small percentage of a company.
Also, when you purchase a stock of a company, this means you are simply buying a unit holding rights of the company. Also, the stocks stand for the company’s total earnings. So whenever you purchase a number of shares from a company this means your rights in the company is much stronger. As a result, you get better profits only if the company performs well.
Also, each every company launch in the market as the Initial Public Offerings or IPO. Plus, the price of the IPO is gets decided on the fact of how much the company is estimated to be worth and how many shares can be issued. The share market can also be split into two main sectors. These sections are the:
In the Primary market, the new shares are first sold through the IPO. Most of the institutional investors purchase most of the stocks from the investment banks.
On the other hand, there is a secondary market where all the trading goes to people like you and me. As well as the institutional investors also use the secondary market to make their investments.
How to invest in the stock market?
1. Get A PAN Card
The first step is to get a PAN card. PAN card stands for Permanent Account Number. And it is a 10 digit code which is used for understanding your financial status. No matter if you are going to invest in the stock market or in mutual funds or want to make any kind of investment PAN card is one of the extremely important documents that you will be needing.
2. Get a Broker
After that, you will have to find a broker. As it is quite tough for us to go and directly invest in share market. Hence we will need a broker. But the question is who a broker is? Well broker can be an individual person or company who will offer us different help during the whole process.
If you look around, there are quite a lot of organizations are there which offers broker services. Even you can check out online websites like ICICI Direct, Sharekhan, Kotak Securities, Indiabulls and so on.
3. Get a Demat and Trading Account
The next job is to get a demat and trading account. However, your broker will help you with these things. But in case if they do not offer such services or you do not offer them. Then you will have to get these services from third party organizations. Even you can try out this on Website called 5paisa at Zero Brokerage.
But the question is why do you even need them? Well, a demat account will help you to store all the shares that you will purchase and allow you to manage. And with the help of the trading account, you will be able to do the stock buying and selling job.
Finally, I would say, before investing any of your money do make sure to do proper research. And only after that, you should make your investment choice. Else, you may face loss with your first investments. Also, for any questions do comment below.