Stock Market as perceived by many is a complicated trading platform, meant to be understood by only the financial experts. You are not alone who is terrified of investing in the stocks, there are many who perceive it as a gambling business where the chances of losing money is no less. But the legendary investor Warren Buffet suggests rightly that “Risk comes from not knowing what you are doing”. Thus investment in stocks when done with appropriate knowledge and in a disciplined manner will help you reap long-lasting profits.
Let us help you unwind the basics of Stock Market for better investing
There are majorly two ways of Stock Trading-
1. Through a Broker
2. Via utilising the services of financial institutions where banking and Demat account are integrated.
Buying Stocks using a broker/Online agency
It is necessary to be ready with your research before finalising a broker. The chosen top brokers in india should be a registered member of Securities and Exchange board of India (SEBI) or any other major stock exchange. The broker does trading on your behalf.
As many brokers listed in stock exchange directory are often inactive or are active while dealing with large companies. Thus it becomes important to brief your broker with clear instructions. Or look for an advisor who has in-depth knowledge of stock market.
Henceforth, it is wise on your part to go for a brokerage firm with an online trading platform. As it will help you track your portfolio in real time.
Creating a demat/trading account
After deciding a broker, your next step is to create a demat and a trading account. The demat account keeps you accountable for the shares bought and sold. Demat account cannot work by itself, a trading account is mandatory to buy and sell shares.
How to buy/sell shares
The broker buys the stocks on your behalf. For instance, you want to buy shares of General Motors, you inform broker in detail, how many shares you want to buy, at what price and also on which stock exchange.
The similar procedure is followed while selling. But do remember that there is a defined timeline to make a particular transaction. In any case if the timeline exceeds, your order gets cancelled and you need to make a new order. There are majorly two stock exchanges in India where you can trade- Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
Stock Market is not just for big companies to generate never-ending wealth. It is for everyone who believes in the power of investment. Today, even start-ups have generated capital through public offerings. Thus, start small, do your homework on minimum deposits, charge of brokers, the companies you want to invest money in and your good to go.