Before you begin investing in shares, there is one important account that you need to set up. Yes, you guessed it right - the Demat account. With Indians warming up to financial investments, Demat accounts are being opened up at a pretty fast pace. About 40 lakh demat (dematerialized) accounts were opened in 2018, taking the total number of such accounts to over 3.48 crore. In this article, we will explain to you what it is a Demat account, how to open a Demat account online, and key things to remember as you do these activities. Read on to know more.
As we all know that Investing is a way to a happier ending. Investing the part of your savings is a great way to set aside money while you are busy with life. You can utilize it later so that you can fully reap the rewards of your labor in the future.
Anyways, if you are planning to invest in the share market, how to invest in the first question that strikes your mind. Well, all you need to start investing in the share market are a trading account, a Demat Account, and money to invest. A trading account is used to place sell or buy orders. The Demat account acts as a bank where shares bought are deposited in, and where shares sold are taken from.
To open a Demat account, you need to get in touch with a depository participant (DP), an agent of depository, and fill up an account opening form. Along with that, you need to enclose the necessary documents. Also, you need to sign an agreement which includes rules and regulations, and the charges that you will incur. Once the form is processed, you will receive a Demat account number and a client ID by the DP. Further, you can use the details to access your Demat account online.
Below Are the Key Steps to Start Investing in the Share Market
Before you start trading in the stock market, you should understand the requirements and investment goals. Apart from this, you also need to figure out how much amount to invest in what pace. However, if you are a newbie you start with a small amount. Moreover, you should only invest in shares that you are comfortable losing. Firstly, deduct your expenses and debt obligations from your income, what remains is your investment surplus. Further, some amount you need to save for your retirement plan, insurance, and emergency fund. The remaining amount you can invest in stocks and other investment instruments.
Once you understand the investment capacity, investors must analyze the stock market scenario to plan the best investment strategy. Individuals must identify stocks that are suitable for their needs. For instance, if an investor wishes for an extra source of income, investing in dividend-paying stocks is the right choice. Additionally, for investors who want to raise their capital, selecting growth stocks is an appropriate strategy.
Investing at the right time is one of the basic and the most important strategy often overlooked by investors. Buying the identified stocks at the lowest price level will increase the potential profits investors can earn. Moreover, selling the stock when it is trading at the highest price is profitable.
Currently, most of the traders are trading online. Assure that you understand the trading tool your broker has provided and submitted the trade request with the right price and quantity. Your broker would also give you a free tutorial on how to invest in the share market online. On the other hand, if you are looking to trade intraday, you need to add target price and stop-loss. Also, make sure that you decide these levels before you buy shares.
It is important for every investor to track their portfolio to ensure your initial decisions are still correct. A stock market is really huge, and the realities change every second. It is necessary to analyze your portfolio to reduce potential losses and increase profits. This does not mean that you need to react to every change in the price level, but that you must be informed of larger trends in the market.
With these basic strategies, one can easily start their investment journey with confidence. One can achieve success by maintaining discipline in executing their investment strategy, and the hunger to learn something new every day.
Yes, you can start investing in the share market with Rs 500. All you need to have is a Trading account and Demat account to place buy/sell order.
Yes, you can purchase stocks without a broker by investing in shares through a company's direct stock purchase plan.
The most convenient way to place a buy or sell order is through a phone call to your stockbroker. However, online trading is trending right now, so investors can place orders directly via the Internet