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Stock market or share market is nothing but buying and selling of a stock which means buying a particular stock at a certain price and selling the same when the price of the particular stock increases. It’s a part of the free market economy where it benefits companies in increasing the price by presenting stocks, shares and corporate bonds. Stock market is a platform for long term investment that will help you in managing your finances. For beginners stock marketing may seem disconcerting, as it is a little complicated to handle. Only way to avoid risk is by having proper understanding about the marketing strategy. The main reason people put investment in share market is to receive high returns from investment and to build financial status.
However, stocks can be graded by the country where the organization is castled. Nestle and Novartis are castles in Switzerland and are exchanged among six trades of Swiss, where they are appraised as Swiss stock market. These stocks can also be traded (on exchange) in other countries too. As an example, ADRs or American Depository Receipts exchange on US stock markets. Read the article for complete information regarding stock marketing and how it works.
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How to Invest in the Stock Market?
Direct sale is not possible in stock marketing, instead you should depend on a broker who has the authority to trade in the market that enables you to trade through their platform. Check out the requirements given below before you invest in stocks;
1. Individual Documents
- PAN Card/Driving License
- Aadhaar Card
- Photographs
- Account declaration
- Details of a remitted cheque from your active bank account
- Residence proof documents that should be accepted by your depository participant, stock broker etc
2. Demat Account
- You can create a demat account in both online and offline processes with help of depository participants.
- There are numerous banks which provide demat account services for their investors.
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3. Trading Account
A trading account and demat account works together, the main difference between demat and trading account is that demat account is mainly used for buying and selling securities that you intend to trade on the stock market. While you invest in a stock market, both demat and trading account is essential and has equal importance. The National Stock Exchange and the Bombay Stock Exchange are known for primary exchanges where stocks are recorded. Where, few stocks may only be available on either one of these two exchanges. However, it is always better to create your trading account with a depository participant who provides trading on both Bombay Stock Exchange and National Stock Exchange.
4. Linked Bank Accounts
If you link your account with your trading account, there will be cash following in and out of your account from your trade. This action is controlled by the brokers with whom you will rely on to open a trading and demat account. As for now, you can see two-in-one accounts that function as both demat account/trade account. While some brokers come up with three-in-one accounts with the help of which one can have direct trade from their bank account and they can save their securities in the identical location.
Investment procedure
1: What is a stock?
The investment can either be in the primary share market or in secondary share market. But the investment process in both cases are different from each other.
Investment on Primary Share Market
- The Primary Share Market investment can be made through an initial public offering (IPO).
- Once the IPO application is received and considered by the company, then the investors will be allotted with shares based on demand and availableness.
- IPO application is easy through your net banking account via ASBA (Application Supported by Blocked Amount).
- These procedures are mandatory in all the IPO applications. Once the share is allotted, then the right amount will be debited with the balance being declared.
- You can start trading within one week after allocation.
Investment on Secondary Share Market
Secondary Share Market is a platform where selling and buying of stocks among investors are carried out. Given below are the steps to follow to invest in the Secondary Share Market;
- Using your linked bank account, open demat and trading account.
- Log in your trading account.
- In that, you can pick up the stocks that you want to buy or sell.
- Confirm that you have required an amount of cash in your account for buying shares.
- Now you can fix the price of a particular share that you want to buy or sell.
- Wait until a buyer or seller responds to your request.
- Finalize transactions by paying for stock, receiving or transferring money.
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Hope the information provided in this article will benefit all the beginners in investing in stocks. Before you invest in stock, make sure about your investment sphere and financial goals. Making use of advanced tools, advice from experts and proper stock analysis will help you in reducing the occurrence of risk. However, as a starter it is possible to invest with a small fund. You can check out Entri’s latest courses on stock market. Enroll now and begin your journey as an investor!
