How to Start Investing in Stocks: A Beginner’s Guide

These days the stock market is fluctuating and there are many investors who earn money and buy shares Such new investors have some problem how to invest how much money and where to do it. And where else to catch a broker who is worth trusting, then we have a solution to such a problem so let's start

Investment & Need of Investment

One needs to invest to

1. earn return on your idle resources

2. generate a specified sum of money for a specific goal in

life

3. make a provision for an uncertain future

Short & Long Term Options
for Investment

Short Term:

1. Savings Bank Account

2. Money Market or Liquid Funds

3. Fixed Deposit with Banks

• Long Term:

1. Post Office Savings

2. Public Provident Fund

3. Bonds

4. Mutual Funds

Step for investment share market

1.Get a PAN card, if you don't have one.

First of all, you must have a PAN card, as you will save the demat account, it is not possible to invest without a PAN card.

2.Choose your Stock Broker

Individuals can't buy/sell stocks directly on the national stock exchanges like the BSE and NSE. Instead, you need the help of intermediaries called brokers.

A stockbroker is an authorised person/company who can buy/sell stocks on the markets. SEBI (Securities and Exchanges Board of India) is the organisation responsible for regulating the country's stock market. The SEBI awards license to individuals/companies to buy/sell shares on stock markets. Individuals/companies who hold these licenses are known as stockbrokers.

3.Set up Demat and Trading Accounts

Once you have decided on a broker – individual, company, or online platform – the next step is to set up a Demat and trading account.

Demat account is the place where you digitally store the stocks/shares in your name. Think of it as your online stock portfolio. Stocks cannot be stored in a Demat account in the physical format. It can only hold shares in a dematerialised state. Hence the name Demat.

All the shares that you buy from the market are held in your name in the Demat account. Stocks that are sold will be removed from your Demat account. At any time, the Demat account reflects the shares in your portfolio.

4.Understanding the Role of the Depository Participant

Besides the Demat and trading account, there is another term that you must be aware of before you begin trading on the stock market. This is the depository participant. There are two depositories in the country:

NSDL – National Securities Depository Limited

CDSL – Central Depository Services Limited

Both these depositories offer depository participants to hold their shares. Though the depository participant sounds similar to your Demat account, it's not the same.

The Demat account shows the number of shares you hold, the trading account shows the buying/selling that has taken place in your account. The depository participant is where the shares you purchased and sold are held.

Most brokers register you for the depository participant, while you open Demat and trading accounts.

5.Register for UIN (Optional)

If you are looking to trade shares worth more than Rs. 1,00,000 at a single time, then you need a UIN (Unique Identification Number). You can ask your broker to get you the UIN. If you're a beginner, then UIN is not needed. You can register for it later when you decide to go big on your trades.

WARNING

You should invest money according to your ability, which you can bear because the shares keep on increasing due to which sometimes there is profit and sometimes loss.