Just sit down with your friends and ask the question how is the market today? and there will be endless opinions coming in from everywhere. The most interesting fact is that people with no knowledge of the capital market will be actively participating in the debate and at times may also give tip on how to invest in the share market. So if you are someone who really wants to know how you can actually invest in the market, then this is how to get the first push for investing in the share market in India.
You must have the following things to start investing in the share market in India:
PAN Card:
PAN is an essential requirement for carrying out financial transaction in India. It is alpha-numeric 10 code code which carries all your financial information including tax paid and liabilities. It is the most important document that will need to open a Demat account, so the first thing to do will be to get a PAN card if you don’t already have one.
Broker:
Since we cannot go and buy shares directly from the stock exchange so there are authorised people who can do such a transaction, they are called brokers. They are registered with SEBI and licensed to transact on the stock exchange on behalf of their clients. You may want to compare the brokers by searching for Top 10 stock broker in India and compare their services and finalize the one you like.
Demat and Trading Account:
Once you have finalized the broker, be it person, company or online, the next thing you will need is a demat and Trading account. Demat account allows you to hold your purchased shares in an electronic form. It is an account in dematerialised state or Demat. It will help you store your shares you buy from the capital market through your broker and keep them safe in your name. You may even sell them whenever you wish to, all the reports of the transaction carried out by you will reflect in the statements that you will receive at regular intervals from your broker.
Buying and Selling
For buying or selling shares, you must contact your broker with the quantity of shares you need for whichever company. For e.g. if xyz ltd is trading at Rs. 885 at the moment and you want to buy it at Rs. 840, you can ask your broker to put a buy call for that particular stock and when the price falls to your buy price, the order will be executed and you will be able to see those shares in your Demat account.
A thorough research in needed for placing order as a single mistake can cost real money. You can even do buy and sell on your own. All you need to do is ask your broker for your online trading credentials, take a short tutorial from their website and start trading. Initially, the sum invested should be low and as and when you gain experience you can increase your capital.