Many people in India are interested in investing their money in the stock market, but due to the disbelief that “Investing is very difficult and also hard to complete the formalities to get the investing accounts”. In reality the investing in the stock market has become a very easy task that even the person who is earning less than 100$(5000Rs) per month can invest and add some extra money to his monthly or yearly income. So we wanted to erase the disbelief from the mind of our readers and to start investing in share market.
The below are the 4 simple steps, follow them properly, No big deal! Start investing in Indian stock market.
1) BANK ACCOUNT:
The person who want to invest in the share market should have the Savings account in any of the nationalized bank. Since everybody will be having the bank account this will not be the hurdle in getting the Demat account.
2) PAN CARD:
Nowadays getting PAN card has become an easy job, there will be number of brokers per street if you contact them and give them the identity proof they will get you the PAN card in no time. The PAN card is essential because it’s compulsory for getting Demat account, since you will be paying the TAX for the income getting from the share market. Next comes the selection of the brokerage firms, brokerage firms are the one who provides the Demat account and they help you to trade or invest in share market by charging some brokerage amount and yearly fixed account maintenance charge.
Since the competition in brokerage firms have increased there is a competition in the price they charge for the brokerage so select the brokerage of your need. But always go with the nationalised brokerage firms which are accepted by SEBI which look after all the things related to Indian stock market.
3) DEMAT ACCOUNT:
Then comes the Demat account, there are two central depositories in India i.e. CDSL and NSDL that handles the settlement or holding in dematerialised form in Indian stock market. Like RBI is having many sub banks like SBI, HDFC which provides the Banking service. The above two depositories joins with other institutions or banks to give the dematerialised accounts for the people like SBIcapsec, indiabull securities, PNB Paribas etc.
Even your savings bank will be having the Securities section which deals with the Demat account ,call them get the details from them and provide the documents required to open the Demat account, you will be getting your Demat account in days. So if we take all the above consideration you will be getting the Demat account in less than a month, see how easy is to get Demat account. But during selection of the brokerage firm look at the brokerage price and amount charged for maintaining accounts and any hidden charges.
4) START INVESTING:
Once you get the Demat account you now has the right to invest in Indian stock market, but before investing you should know the basics of share markets and the rules to follow so not to get your money burnt and the fundamental analysis (ratios explained in the last post) before buying the stocks. And every brokerage firm will be having the two classes of trading i.e. one is online trading where you can buy or sell the share of the company you wanted on your own through some online software or through browsers, and the other one is through Brokers i.e. a person will be assigned to you so that he will guide you in investing: which companies are good to buy and when to sell the shares etc. from above two classes the first one is the best choice because you will be having full authority and also the less noise which affects your decisions in buying and selling i.e. from the brokers (look at the post “myths of investing” where I have explained why you should not listen to brokers”).
There is nothing like minimum amount required to invest, but if you are a beginner then it’s better to analyse the stock market and gain experience by investing 100$ (5000 Rs) per month so there will be nothing more to lose if you do mistakes earlier, but when you are experienced and invested more money the small mistakes can lead to a great loss , by following some rules (which I am going to write in a next post) you can avoid your money getting burnt.
Before you start investing, do read my article powerful ratios for successful investing, so that you could be able to judge and reduce the risk of loosing money as ratios tell you which company would fetch you profit among various players in the market.
Happy Investing –Feedose.com