Beginners Guide to Invest In the Share Market

By the time a person starts to earn, they realise that simply earning and saving money is not enough. Inflation always cuts into the value of stagnant money, which is why investing is crucial. In order to accumulate enough finances to meet future goals, one must invest in avenues that will multiply the savings. This is the major reason why people turn to the share markets for wealth generation. If you know how to invest, the share markets are a promising approach towards long term wealth creation. However, before you being to invest in the share markets, you should be aware of the basics.  

How to Begin trading?

In order to start trading in the share markets, you must have an online demat account and a trading account. A demat account is just like a bank account, but for shares. The shares that you purchase from the stock market are stored in an electronic form in a demat account. On the other hand, a trading account acts like an intermediary who facilitates the buying and selling of shares. Whether you decide to undertake share trading individually or through a broker, you need to have a demat account and a trading account.

How to open a demat account online?

You can open a demat account with a bank or a brokerage firm. After selecting the firm of your choice, you can follow these steps to open an online demat account:-

• Download and fill up the online demat account opening form and submit it with the required documents such as PAN card, address proof etc.
• Read carefully through the terms and conditions in the form and clarify any doubts with the brokerage firm.
• Once the forms are processed, you will be provided with the account number and client ID.

How to buy and sell shares?

As a beginner, it is always better to start trading with a broker or a brokerage firm. The broker will buy and sell the shares on your behalf. All you need to do is inform the broker about the company name, the quantity as well as the price at which you are willing to buy to sell the shares. The trading of shares in India, takes place through the two main stock exchanges, NSE and BSE.