How To Get Started in Stock Market?
Can I invest in the stock market?
Let us go by the step by step process of investing in the stock market. The stock market is for everyone. You can also invest in the stock market and create wealth for yourself. The only thing you should keep in mind is that the stock market is for long term investment. Wealth can be created only in the long run.
Getting started in the stock market :
First of all, you should have a Demat account and trading account. You should approach a broker to get these account opened for you. Demat account is for holding all your shares and trading account help you in trading in the stock exchange.
You can open these accounts from your banks where you have a savings account or with other discount brokers like Zerodha or traditional brokers like IIFL or Motilal Oswal. Brokerage rates will be at the lowest with discount brokers. Now traditional brokers started matching them. Banks have their standard rates of .50% as the brokerage rates. If you are just going to invest and hold on to your investment for a long time, these rates doesn’t matter much. If you are going to trade frequently, then you can look at discount brokers.
Only when you get this opened you can start investing in the stock market.
Next moves :
By now your Demat and trading account is opened. You are now eligible to trade or invest via the stock exchange. India has a National Stock exchange or NSE and Bombay Stock exchange or BSE.
BSE is the oldest stock exchange in India and one of the oldest in the world. It is started in 1875. You can buy any stock which is listed in these exchanges. Prices in both these exchanges will be identical. You can buy in BSE and sell in NSE or vice versa as well.
Buying and selling became easier when the online platform was introduced in the ’90s. Till that time you need to call a broker sitting in Mumbai exchange to trade on your behalf. By that time price of the stock would have moved either side. You should have transferred the amount to your Demat account on the day of buying or selling.
Now you have learned buying and selling in a stock exchange is easier. After you have bought a stock, it will be automatically credited in your account within the net 2 working days.
Follow the rules!
It is difficult to learn everything and then start investing in the stock market. It is like knowing what will happen in life and then start taking action. You need to go with the flow just by following the rules which you had set.
Below are the few points which you can follow for better investment experience,
Invest only in large-cap or known good companies
- Check with someone who has invested for a long time
- Do your own research
- Invest a small amount and test
- Increase the allocation as you gain more information
- Be aware of the loss, minimize it and keep moving by investing in the next one.
- Don’t invest everything in one stock
- Let go off the fear of losing money before starting itself, this will give the freedom
- Have goals for your investment
Source of information ;
The biggest source of information and place to learn/research for me when I started investing was,
Dalal street journal,
money control website
You also refer books by Parag Parikh on Value investing and “5 rules of investing” by Pat Dorsey.
“Invest in the stock market for creating wealth and not for making money in the short term”