Investing in the Stock Market

Who doesn’t want their capital to grow! There are many ways through which people spend their hard-earned money to get the benefit of interest regarding money. Investing in stock market is one of the efficient way for any individual or institution to boost up the monetary fund, but unfortunately very few of us have interest in share market investment despite it being discussed on a regular basis on different channels on TV. But still, people have much confusion about stock market investment. So, here we are going to give a basic idea about stock markets, which, I think, would be a very helpful tool for the beginners to invest their money in the right place.

Let us clarify some fundamental queries:

1): what is a stock market?

To explain in short, stock market is a registered exchange where public limited companies can enlist their names for share transaction with the public by following some terms and conditions. By investing in the listed companies, the shareholder gets a legal ownership by sharing profit, loss or dividend by the enterprise.

2): HOW CAN WE INVEST IN A SHARE FOR THE FIRST TIME?

Before investing in stock market, anyone has to clear up certain things, such as---

•    Must possess a PAN Card---- It is the Permanent Account Number which is the core requirement for any investment.

•    Should open a D-MAT account and trading Account---D-Mat account is to hold the shares and trading account is to buy and sell the shares.

•    Should contact a broker. ---

A well-reputed share broker will handle all the transactions and guides you, as we cannot make the deal ourselves.

•   To choose the Depository Participant ---- A depository participant is needed as he will act as an intermediary between the depository and the investor. In India, NSDL and CDSL are the two depository participants. They will hold all the shares you bought and release the shares you sold.

3): DIFFERENT WAYS OF INVESTMENTS: Other than the above basic requirements, you have to decide how and where you will invest.

Investing in a share is mainly of three types:

1) Long-term Investment which is based on fundamentals.

2) Short term or very short-term Investment which is based on charts and historical.

3) Speculating Investment which is based on future options calls (It gives the investor the right to buy share in future date) and puts (The right to sell but not obligation to sell the share).

An investor should keep an eye on one thing to maximise his gain because different themes have different motives.

SAFE BUYING OF A STOCK: FEW TIPS.

• When nobody intends to buy shares in the market, then buy a good company at a lower bottom price and sell it on when price goes high.

 • Purchase the industry leader i.e., Hindustan Leaver in FMCG sector.

• Look for the future industry like solar companies, electric car companies, commerce companies etc.

 • Always restrict the total number of stocks to 15 and monitor daily.

•   Watch our society trends i.e., today air conditioner is a necessity so that AC companies will perform better in future.

 Inspect the balance sheet of invested companies.

•    Never follow the crowd.

•    Hold on your shares, don’t rush for profits.

•  Buy as soon as a stock makes new high after a normal reaction.

•    Trade only the active stocks (Daily Traded Stocks).

•   Never buy a stock just because it has fallen from a great   high nor sell it because it is high priced.

•     Prepare a chart of the invested companies for the price movement in a bar chart and identify the resistance and breakout/breakdown of a share in the pattern on a daily basis.

Last but not the least, partially take the profit out from the investment and reinvest it in a new theme regularly.

So friends! Go through the above information and begin to think rationally. Investment in the stock market can make a big difference in your capital gain, so make up your mind for a fruitful investment plan in the stock market.

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