If you want to invest in the stock market but don't know where to start, check out this beginner-friendly guide
Investing in the stock market can be confusing for those without prior experience or knowledge. However, it's also true that investing in the stock market with the right strategy can be one of the most profitable ways to increase your wealth in the long term. If you have monthly savings that are not getting utilised in investments, consider using them to invest in the stock market.
in simple terms, a share or stock is a small portion of a company's ownership. By purchasing shares, an individual essentially becomes a shareholder in the company. Companies sell shares privately or publicly on the stock market to raise capital for various reasons, such as employees' salaries, growing the business and paying off debts.
Companies can choose to sell off shares privately or through an Initial Public Offering (IPO) to become publicly listed companies on the stock market. Once a company has become publicly listed, anyone can purchase or sell their stocks. The Securities and Exchange Board of India (SEBI) oversees the process of companies going public (IPO) and the overall stock market to ensure compliance with the local laws and guidelines.
The primary stock exchanges in India are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) where all the stock trading happens. Sensex and Nifty are indexes that track the performance of the top 50 and 30 companies listed on their respective exchanges.
There are two main ways that people use to make money on the stock market: buying shares or stocks of companies at a lower price and selling them later at a higher price, or receiving dividend income from owning shares or stocks in profitable companies. Some professional traders also make money by speculating and predicting stock prices, but this practice should not be tried by amateur investors.
If you're wondering how to invest in the Indian stock market online, don't worry, you can easily purchase stocks and other securities online from the comfort of your own home. Just follow these simple steps:
First, create a DEMAT account and make sure it's linked to your existing bank account and PAN Card for smooth transactions.
Next, log in to your DEMAT account through the mobile app or web platform.
Carefully choose which stock you want to invest in, after thorough analysis. Make sure you have enough funds in your bank account to purchase the shares you want, then buy the stock at its listed price and specify the amount of stocks you wish to purchase.
Once a seller confirms, your purchase will be executed. After the transaction is complete, the required amount will be deducted from your bank account and the shares that you have bought will appear in your DEMAT account.